Stocks bounced back yesterday across the world, supported by earnings expectations, while oil prices fell on evidence of higher US oil production and increasing US crude inventories.
European shares rallied, pulling up from Monday’s 22-month lows, partly on expectations that the reporting season will deliver double-digit earnings growth. A rebound in Italian assets helped battered equities find firmer ground as well.
Japan led Asian shares higher with the Nikkei index up 1.25 per cent after a decline of nearly 2 per cent on Monday.
On Wall Street, tech shares led the way a day after a decline in Apple dragged the Nasdaq lower, while the healthcare sector also rose after earnings reports from Johnson & Johnson and UnitedHealth Group.
“A couple of inputs that caused a sell-off in the last two weeks, such as rising interest rates, higher oil prices and the dollar, have calmed down to rational levels and the market may be able to positively respond to that as we work our way through the earnings season,” said Art Hogan, chief market strategist at B. Riley FBR in New York.
The Dow Jones Industrial Average rose 244.55 points, or 0.97 per cent, to 25,495.1, the S&P 500 gained 24.85 points, or 0.90 per cent, to 2,775.64 and the Nasdaq Composite added 74.71 points, or 1.01 per cent, to 7,505.46.
The pan-European FTSEurofirst 300 index rose 1.30 per cent and MSCI’s gauge of stocks across the globe gained 0.91 per cent.
Emerging market stocks rose 1.09 per cent. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.61 per cent higher.
Crude futures fell after the US Energy Information Administration (EIA) said oil production from seven major US shale basins is expected to rise by 98,000 barrels per day in November to a record of 7.71 million.
US crude fell 0.39 per cent to $71.50 per barrel and Brent was last at $80.46, down 0.4 per cent on the day.
Sterling rose against the dollar after data showed basic wages of workers in Britain rose at their fastest pace in nearly a decade. The British currency was last trading at $1.3213, up 0.48 percent on the day.
Meanwhile, a survey showed German investor morale darkened more than expected in October.
The euro rose 0.02 per cent to $1.1579, the Japanese yen weakened 0.38 per cent versus the greenback at 112.22 per dollar. The dollar index fell 0.05 per cent.
Investors waited to see Washington’s view on China on the US Treasury’s semi-annual currency report due this week, after media reports last week that it has not labelled Beijing a currency manipulator.