A volatile ride for global markets this week looked set to end with a whimper yesterday as lingering worries over Chinese economic growth and the Federal Reserve’s plans to raise interest rates weighed on stocks, but oil rebounded sharply.
US crude jumped more than six per cent as a rally in gasoline prices and air raids in Yemen prompted traders to scramble to cover short positions.
US crude has climbed about 16 per cent in two sessions, for the second-largest two-day rise in 25 years if the day’s gains hold.
The Fed is waiting to see how data and markets unfold over the coming weeks before deciding whether to raise rates at its meeting in mid-September, Vice Chair Stanley Fischer told CNBC.
Chinese stocks jumped for a second straight day, rising more than 4.0 per cent, after authorities said pension funds managed by local governments will soon start investing two trillion yuan ($313.05 billion) in stocks and other assets.
Wall Street stocks were mostly lower, a sign investors were reluctant to take big positions going into the weekend, after a week marked by the worst day for equities in four years on Monday and the biggest two-day gain since the financial crisis.
The Dow Jones industrial average fell 40.32 points, or 0.24 per cent, to 16,614.45, the S&P 500 is down 3.07 points, or 0.15 per cent, to 1,984.59 and the Nasdaq Composite added 2.10 points, or 0.04 per cent, to 4,814.81.
Major European equity indices finished higher after a late-session rally, helping lift MSCI’s all-country stock index 0.3 per cent.
The pan-European FTSEurofirst 300 index rose 0.34 per cent to close at 1,435.13.
The eurozone’s blue-chip Euro STOXX 50 index gained 0.18 per cent, but Germany’s DAX shed 0.17 per cent, putting it nearly 20 per cent below a record high in April.
Oil saw its biggest one-day bounce since 2009 on Thursday, with North Sea Brent and US light crude rising more than 10 per cent. US crude is on track for its first weekly gain in nine weeks, ending its longest losing streak since 1986.
Brent surged $3.16 to $50.72 a barrel yesterday and US crude rose $3.01 $45.57 a barrel.
The US dollar gained for a fourth straight session, buoyed by calmer financial markets and generally positive US economic data that supported the notion that the world’s largest economy was on a stable growth path.
The dollar index was up 0.41 per cent at 96.002. The euro slipped 0.35 per cent to $1.1204. Against the yen , the dollar rose 0.17 per cent to 121.24.