Chinese stocks up 5.3%, global markets rise after Wall Street rally
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Bloomberg’s Mark Barton reports on the U.S. equities rally, and its impact on the EU and emerging markets. He speaks with Francine Lacqua and Manus Cranny on Bloomberg Television’s “The Pulse.” Bloomberg
Global stock markets rose Thursday, after Wall Street rallied and broke a six-session losing streak, although experts warned there could be more volatility ahead.
The Shanghai composite index, whose sharp drop Monday triggered a global sell-off, rebounded from several days of declines to close 5.3% higher at 3,083.59 points, its biggest one-day gain in eight weeks. Japan’s Nikkei 225 closed 1.1% higher at 18,574.44 points and Hong Kong’s Hang Seng index rose 3.6% to 21,838.54.
Traders were encouraged by comments from William Dudley, president of the New York Federal Reserve Bank, that the case for a U.S. interest rate hike in September is “less compelling to me than it was a few weeks ago,” given China’s troubles, falling oil prices and weakness in emerging markets.
“Traders took the cue to buy,” said Nicholas Teo of CMC Markets in a report.
Germany’s DAX index, France’s CAC 40 and Britain’s FTSE 100 were all more than 2% higher in early afternoon trading Thursday. U.S. stock futures pointed around 1% higher.
Panicked selling over the past week was triggered by declines in China, but analysts said it had no basis in economic developments. The Shanghai composite index is down by more than 40% since mid-June.
The Dow Jones industrial average rebounded Wednesday, surging nearly 620 points — its third-best daily point gain ever and best since 2008. The slide in the Dow over the past week wiped out some $ 2 trillion in stock value in the U.S. Wednesday’s historic day on Wall Street could go a long way toward stabilizing the market after six days of heavy selling.
Though stocks in China ended lower Wednesday, the losses were not as dramatic as in recent days. Chinese officials took steps to shore up its economy and markets Tuesday by cutting interest rates and taking steps to make it easier for banks to lend money to borrowers.
Analysts said there are probably more roller-coaster days ahead because of worries about China and a possible Fed rate increase.
Contributing: Adam Shell, Associated Press
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