A roundup of trading on major world markets:
NEW YORK – Wall Street has rallied after a hesitant start as oil prices surged towards their biggest gain this year and ECB President Mario Draghi raised hopes of further stimulus.
All 10 major S&P 500 sectors were higher, with a 3.2 per cent jump in energy stocks leading the pack. All but two Dow components were higher as well.
The European Central Bank kept its main rates on hold and Draghi said the central bank would “review and possibly reconsider” its monetary policy as early as March. Many analysts had not expected a rate cut before June.
Oil prices reversed course to trade up more than five per cent, just shy of $US30 a barrel, after US crude stockpiles did not rise as much as feared.
“What a difference a day makes!” said Stephen Wood, Chief Market Strategist at Russell Investment Group in New York.
The US stock market was bound for a correction as rich valuations were becoming a headwind, Wood said, adding that the main drivers of the market remained unchanged.
“We’ve got the same three horsemen: oil, China and the U.S. Federal Reserve driving the markets.”
At 0650 Friday (AEDT), the Dow Jones industrial average was up 101.91 points, or 0.65 per cent, at 15,868.65.
The S&P 500 was up 9.05 points, or 0.49 per cent, at 1,868.38.
The Nasdaq Composite index had reversed course and fall into the red. It was down 0.74 points, or 0.02 per cent, at 4,470.95.
LONDON – Britain’s top share index has bounced from its lowest in more than three years, after the head of the European Central Bank implied further monetary stimulus was coming.
The gains extended on Thursday after oil prices rebounded.
The ECB will review its monetary policy in March, the central bank’s president, Mario Draghi, said after the bank’s policy meeting on Thursday. Stocks rose on anticipation of further loosening of monetary policy.
Britain’s FTSE 100 rose 100.21 points, or 1.8 per cent, to close at 5,773.79. The index had entered bear-market territory on Wednesday, down more than 20 per cent from last April’s record high, as slowing growth in China and a slide in oil prices took their toll.
“It was always likely that Draghi’s message was going to be dovish today given the turmoil in the markets so far this year,” said Craigh Erlam, a senior market analyst at OANDA.
“That said, I don’t think people anticipated such a blatant and clear warning of a monetary policy response at the next meeting.”
Even so, the FTSE underperformed European indexes, which are more sensitive to weakness in the euro.
HONG KONG – Chinese stocks gave Asia another bruising.
Oil prices, down more than 25 per cent this year, have been one of the main drivers of the cross-asset rout, were also steadier at $27.60 for Brent and $28.15 for WTI.
China stocks ended down three per cent after a volatile session there. That in turn sent MSCI’s broadest index of Asia-Pacific shares outside Japan to a new four-year low.
Japan’s Nikkei average ended down 2.4 per cent, adding to its 3.7 per cent plunge in the previous session.
Shanghai-based investor director at Nanhai Fund Management Co, David Dai, said fears of a prolonged bear market were, nevertheless, overdone.
“With stocks having fallen so much, much of the risk has been priced in and another free-fall is quite unlikely, although the chance of a sustainable rebound is slim,” he said.
WELLINGTON – The S&P/NZX 50 Index dropped 32.8 points, or 0.5 per cent, to 6080.9.
