Global markets extend rally on US data

LONDON: World stock markets rallied Wednesday with no “Halloween horrors” as investors were boosted by runaway US consumer confidence, dealers said.

By early afternoon, Frankfurt was up 1.2 percent, London won 1.5 percent and Paris surged 2.1 percent, with shares in French cosmetics giant L’Oreal soaring 6.5 percent on strong sales.

“No Halloween horrors as Red October draws to a close,” concluded CMC Markets analyst Michael Hewson.

October has been a painful month for equities, which have seen billions wiped from their values, and observers warn of further pain, with Washington and Beijing seemingly unlikely to back down from their tariffs stand-off anytime soon.

Europe’s markets had faltered Tuesday, also on weak economic data and political uncertainty over Italy and Germany.

The euro hit a fresh two-month low point at $1.1331 on Wednesday. The dollar struck 6.9783 yuan, the highest level for a decade.

However, New York turned in a healthy performance Tuesday — the Dow added 1.8 percent while the S&P 500 and Nasdaq jumped 1.6 percent — after data showed US consumer confidence at a new 18-year high in October.

The positive tone spilled across into Asia, where equities leapt Wednesday with attention also turning to the release of key US jobs data later in the week.

“There’s been a strong rally in stock markets… as investors seek to recover from the recent declines,” noted XTB analyst David Cheetham.

IG analyst Joshua Mahony noted however that “this bullish market sentiment comes despite a somewhat dour 24-hours for the global growth picture”.

Despite Wednesday’s rally, a mountain of problems — from China-US trade tensions and Brexit, to Chinese economic weakness and rising US interest rates — is keeping optimism in check.

– Markets licking wounds –

“Even after this morning’s gains, global equity markets are left licking their wounds after a brutal month,” noted Cheetham at XTB.

“Ongoing US-Chinese trade tensions, slowing global growth and rising US interest rates all have contributed to the sell-off and the question going forward now is whether the worst of it is over or if there’s another wave of selling into year-end.

“The recent stabilisation is a pleasing development at least,” he added.

Meanwhile, a strong jobs report out of Washington Friday could provide more evidence for the US Federal Reserve to hike rates and put further upward pressure on the greenback.

Bitcoin, marking its 10th anniversary, dipped to $6,253.

– Key figures around 1145 GMT –

London – FTSE 100: UP 1.5 percent at 7,137.96 points

Frankfurt – DAX 30: UP 1.2 percent at 11,426.04

Paris – CAC 40: UP 2.1 percent at 5,085.19

EURO STOXX 50: UP 1.5 percent at 3,194.38

Tokyo – Nikkei 225: UP 2.2 percent at 21,920.46 (close)

Hong Kong – Hang Seng: UP 1.6 percent at 24,979.69 (close)

Shanghai – Composite: UP 1.4 percent at 2,602.78 (close)

New York – Dow: UP 1.8 percent at 24,874.64 (close)

Euro/dollar: DOWN at $1.1338 from $1.1345 at 2100 GMT on Tuesday

Pound/dollar: UP at $1.2738 from $1.2706