Stocks worldwide bounced off from a close two-year low on Thursday, raised by a dramatic U.S. stocks surge. However, a tumble in Chinese industrial profits and renewed Italian banking concerns offered a calming prompt of the difficulties weighing on the world economy.
The Dow Jones Industrial Average rushed over 1,000 points for the first time on Wednesday, leading a wide US stocks rebound, after a report that holiday sales were the sturdiest in years helped appease worries about the health of the economy.
Stocks in Asia and Europe took their reminder from this rally, and opened powerfully, pushing the MSCI world equity index, which tracks shares in 47 countries, 0.4 percent higher. The index had already spiked 2.3 percent in the past session, climbing off a 22-month low hit on Christmas Eve.
“The relentless selling which prevailed leading up to Christmas has mercifully halted as U.S. stock markets recorded significant gains,” said Stephen Innes, a trader at online FX broker OANDA.
He ascribed the rally partially to a Mastercard Inc. report that sales during the U.S. holiday shopping season increased the most in six years in 2018, helping allay worries about the health of the U.S. economy.
“The surge in online purchases over the holiday season should be a reminder for the markets never to underestimate the purchasing power of the U.S. consumer,” Innes said.
There were also some endeavors by the White House to temper its criticism against the Federal Reserve. Kevin Hassett, chairman of the White House Council of Economic Advisers, said on Wednesday that Fed Chairman Jerome Powell’s job was not in danger.
Nonetheless, the rally fizzled slightly in Europe where shares opened higher 0.5 percent, then deleted most of the early gains. France’s CAC index and Spain’s Ibex stood 0.3 percent higher while a pan-European stock index was flat, pulled lower by Italian stocks.
Milan was hit by renewed worries over the country’s banking sector after moneylender Banca Carige was deprived of a cash call by its biggest shareholder.
The news weighed on Italian government bonds too, curbing a month-long rally and pushing 10-year yields higher on the day.
Previously, MSCI’s broadest index of Asia-Pacific shares outside Japan increased 0.6 percent and away from eight-week lows while Japan’s Nikkei managed to pull out of bear market territory nearly 3.9 percent higher.
Australian shares jumped 1.9 percent.
However, Chinese shares did not join the rebound, with mainland shares along with Hong Kong fall 0.4 percent. Earnings at China’s industrial companies fell in November for the first time in almost three years.
The worries over a hesitating worldwide economy and indications of a crude oil glut pressured oil prices, sending Brent futures 2.4 percent lower to $53.26 a barrel and partially reversing the previous day’s 8 percent jump.
Wednesday’s growth was triggered by the Organization of the Petroleum Exporting Countries (OPEC) and its partners, including Russia, agreeing to limit yield by 1.2 million barrels per day (bpd) starting in January.
U.S. Treasury yields too altered direction after increasing sharply on Wednesday, and plunged three basis points to 2.765 percent.
Another safe-haven, gold, was up 0.4 percent, staying just beneath a six-month top hit earlier this week.
The dollar surrendered some of its overnight gains, but losses were limited to around 0.3 percent against a basket of currencies. Against the yen, a perceived safe haven, it was off 0.5 percent at 110.82 yen.
It had increased almost 1 percent overnight, booking its biggest single-day gain against the yen since late April.
Interested to see more? Follow HQBroker News now for more updated news from the global market. You can read more news articles about the Stock Market here! Join and enjoy our community only here in HQBroker.
Categories: Stock Market