LONDON: European stock markets and Wall Street swept higher Wednesday on higher oil prices and hopes of new Chinese economic stimulus measures, dealers said.
But enthusiasm was capped by uncertainty about a possible deal between major oil producers, and also about central bank policy as investors awaited the minutes of the Federal Reserve’s January meeting later Wednesday for guidance.
Frankfurt and London closed with gains of 2.7 percent, while Paris rose by 3.0 percent.
Equities were also trading higher on Wall Street for the third straight session, with the Dow up 1.3 percent approaching midday.
Briefing.com analyst Patrick O’Hare called Wall Street gains “sentiment driven”, saying they appeared to be based on an assumption Iran would limit its oil output in cooperation with other major producers.
Earlier, Asia indices hit reverse after a recent rally, with energy firms down after an oil output freeze deal by top producers Saudi Arabia and Russia left investors disappointed.
Shanghai shares however rallied more than one percent, adding to the previous day’s surge, on hopes for fresh stimulus from China’s leadership.
And world oil prices firmed as Iran’s oil minister started talks Wednesday with his Iraqi, Venezuelan and Qatari counterparts as investors watched whether Tehran would follow Saudi Arabia and Russia’s pact to freeze output.
The mining sector forged ahead on the brighter outlook for commodity demand from key consumer and Asian powerhouse economy China.
“Still, gains in the market are on shaky ground when they’re based on the most beaten up sectors,” said CMC Markets UK analyst Jasper Lawler, injecting a word of caution.
“When the biggest fallers year-to-date lead the day’s gains then it’s a short-covering rally.”
Among London’s top gainers was Swiss mining giant Glencore’s stock, climbing 14.8 percent to 118.15 pence, which was boosted by the company announcing the early refinancing of its $8.45-billion (7.6-billion-euro) revolving credit facility.
Miner Anglo American saw its shares rocket 17.6 percent higher to 468.05 pence.
In Milan, shares in Ferrari received a massive boost after financier George Soros said he had acquired a stake in the luxury car maker, closing 10.4 percent higher at 34.45 euros.
In Asia an early rally lost steam as profit-takers moved in following some hefty gains on Monday and Tuesday.
Tokyo’s Nikkei fell 1.36 after enjoying a more than seven percent surge in the previous two sessions, with a stronger yen acting as a millstone.
Hong Kong lost one percent, Sydney ended 0.6 percent lower and Seoul was 0.2 percent off.
However, Shanghai added more than one percent on top of the 3.3 percent gain Tuesday on growing hopes for fresh measures to kick-start the world’s number-two economy.
The rally came as reports swirled that China would make more cash available to local authorities to spend on new building projects, which reinforces speculation the government is planning fresh stimulus.
Copyright AFP (Agence France-Presse), 2016
Courtesy : BRecorder