World markets rise on hopes US out of recession

World stock markets power ahead on optimism that US is emerging from recession

World stock markets rallied Wednesday after Federal Reserve Chairman Ben Bernanke said the U.S. recession was likely over, a view largely supported by recent economic figures.

Germany’s DAX rose 0.9 percent to 5,677.32 and Britain’s FTSE 100 gained 1.1 percent to 5,099.10. France’s CAC-40 rose 1.1 percent to 3,792.91.

Major benchmarks in Korea, Hong Kong and Australia were up about 2 percent or more, and Wall Street was expected to gain on the open. Dow industrials futures were up 34 points to 9,637.00 and Standard & Poor’s 500 futures gained 3.0 to 1,048.90.

Optimism about the world’s largest economy was supported by data showing U.S. retail sales jumped in August by the biggest amount in three years, although helped by government programs. Separately, a key measure of New York manufacturing climbed to its best level since 2007.

Adding to the feel-good mood, Fed Chairman Bernanke declared America’s worst recession since the 1930s is “very likely over,” even as he warned high unemployment and other troubles could drag on.

“Overall the tone today looks like it will be positive,” said Mitul Kotecha, analyst at Calyon.

He noted respected U.S. investor Warren Buffett has said he was buying U.S. stocks again, which is likely to help sentiment.

Considering such upbeat assessments, he said it was striking that stocks were not even stronger. The S&P rose only 0.3 percent on Tuesday.

“Perhaps finally equity momentum is beginning to fade against the background of a market having largely priced in a lot of the good news already,” he said.

Worries that rising unemployment will slow down economic recovery was also hindering stock market gains. In Britain, the unemployment rate rose to near a 13-year high, while the Organization for Economic Cooperation and Development forecast that joblessness in the 30 leading industrial nations would hit a new postwar high of 10 percent next year.

Wednesday’s rise in stock markets caused the dollar — which is used as a safe haven by traders — to flounder, hitting its lowest point against the euro this year and sinking further against the yen.

The dollar dropped to 90.17 yen from 91.03 yen while the euro rose to $1.4706 from $1.4656.

“The dollar is likely to stay under pressure against most major and Asian regional currencies,” said Kotecha.

He said statistics on U.S. capital flows, due later today, could affect the dollar as it reveals how much international appetite there is for U.S. assets. Inflation and industrial production data are also due.

In Asia, Japan’s benchmark Nikkei 225 index gained 53.15 points, or 0.5 percent, with stocks helped by hopes the country’s incoming government, set to be inaugurated later in the day, won’t make big changes to economic policies.

Hong Kong’s Hang Seng was up 536.55 points, or 2.6 percent, at 21,402.92. In Korea, the Kospi added 1.8 percent to 1,683.33.

Most other markets gained as well: India’s Sensex climbed 0.8 percent, Taiwan’s benchmark rose 1.3 percent and Australia’s index jumped 2.4 percent.

Only China’s market, which is relatively closed to foreign investors and often moves out of step with global stocks, was lower. The Shanghai benchmark fell 1.1 percent to 2,999.71.

Despite signs of a turnaround, economic recovery may be difficult to sustain in coming quarters, analysts said. Tim Schroeders, a fund manager at Pengana Capital Ltd. in Melbourne, says Asian markets could see a 10 percent decline later this year.

“I think the markets have run ahead of the economy for the time being,” said Schroeders, who helps manage about $1 billion in assets. “We’re probably going to see a slowdown in the fourth quarter this year, which will be a fairly dramatic headwind to overcome.”

Oil trade below $71, with benchmark crude for October delivery off 18 cents to $70.75 a barrel in European electronic trading. The contract rose $2.07 overnight.

Posted in Finance, Odd News, Uncategorized and tagged .


  1. Pingback: germany

  2. Pingback:

  3. Pingback:

  4. Pingback:

  5. Pingback:

  6. Pingback:

  7. Pingback: cheap generic viagra online

  8. Pingback: carpeta segura android

  9. Hear why Millions are using this White Noise track for SLEEPING through the night. Click on repeat (loop) and sleep all night long. Optimized sound for smart phones and tablets:

  10. Pingback: sildenafil 100 mg tablet

  11. Pingback: usa online pharmacy

  12. Pingback: buy generic viagra canada

  13. Pingback: 메리트카지노 사이트

  14. Pingback: sildenafil 60 mg cost

  15. Pingback: canada pharmacy

  16. Pingback: viagra online sale in india

  17. Pingback: 메리트 카지노

  18. Pingback: viagra for sale paypal

  19. Pingback: viagra cost in mexico

  20. Pingback:

  21. Pingback: umi thesis

  22. Pingback:

  23. Pingback: usa essay writing services

  24. Pingback:

  25. Pingback: dissertation binding service

  26. Pingback: please help me write my essay

  27. Pingback: what is thesis in writing

Leave a Reply

Your email address will not be published. Required fields are marked *

Human Verification: In order to verify that you are a human and not a spam bot, please enter the answer into the following box below based on the instructions contained in the graphic.