LONDON : Global energy shares led equity gains on Monday as crude oil prices hit three-year highs of almost US$80 a barrel, while U.S government borrowing costs advanced for a sixth week on bets that higher interest rates were on the way.
While early German equity gains fizzled, European energy and banking shares surged around 2.5per cent benefiting from the jump in crude prices and bond yields respectively, with the former at the highest since February 2020. "All in all, it's a positive story as we have a strong economic macro story underpinning everything," said Fahad Kamal, CIO at Kleinwort Hambros in London.
Oil futures have climbed around US$9 a barrel over September. Brent crude traded on Monday at US$79.25 a barrel, while U.S. crude rose 97 cents to US$74.95. [O/R] Investors are therefore repositioning portfolios; U.S. 10-year Treasury bond yields, a key determinant of global capital costs, jumped 9 basis points last week while industrials-heavy U.S. Dow Jones index outperformed the Nasdaq index of tech stocks.
Hong Kong-listed shares in Evergrande's electric car unit plunged as much as 26per cent after it warned it urgently needed a swift injection of cash.