World stocks hit record, oil falls on OPEC cuts deal

World stocks hit record highs on Thursday and the dollar dipped after the U.S. Federal Reserve signaled caution in raising interest rates, while oil fell after top producers extended output cuts for shorter than some in markets had expected.

Index futures (ESc1) (1YMc1) indicated Wall Street would open higher, building on Wednesday’s record closing high in the S&P 500 (SPX). The VIX <.”fear gauge” of expected volatility in the S&P 500 opened at 9.82 (VIX), its lowest since May 10.

European shares fell slightly. The pan-European STOXX 600 index (STOXX) was last down 0.1 percent, led lower by basic resources (SXPP) and energy companies (SXEP). Steelmakers were hit after iron ore prices fell for a third day , on concern over reduced Chinese demand.

Earlier, Asian stocks, as measured by MSCI (MIAPJ0000PUS) gained almost 1 percent to a two-year high. This helped push MSCI’s 46-country world stock index to a record high of 464.38 (MIWD00000PUS). It last stood at 463.78, up 0.2 percent.

Brent crude oil (LCOc1), the international benchmark, fell 58 cents, or more than 1 percent to $53.38 a barrel after delegates said OPEC had agreed to extend output cuts for nine months to fight a global glut. The cuts are likely to be shared by a dozen non-OPEC states. Some in the market had been expecting deeper cuts or a 12-month extension.

“It is a disappointment that OPEC hasn’t done more to balance the markets,” said Olivier Jakob, energy markets analyst at Swiss consultancy Petromatrix. “A nine-month extension of the output cuts is already baked into prices. This shows there’s not much more OPEC can do.”

They showed policymakers agreed they should hold off on raising rates until it was clear a recent slowdown in the U.S. economy was temporary, though most said a hike was coming soon.

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