NEW YORK: Global stock markets rebounded Tuesday, with traders brushing aside worries about political uncertainty and taking advantage of a pullback to buy stocks at lower prices.
Leading bourses in New York, London, Paris and Frankfurt climbed between 0.9 percent and 1.4 percent. Sao Paulo jumped two percent to close at a six and a half year high.
Equity markets have been under pressure in August due to factors that include the deadly attacks in Barcelona, tensions between the US and North Korea and doubts about President Donald Trump following criticism of his response to a white supremacist rally in the state of Virginia that became violent.
"People seem to be a little less worried about political uncertainty and there's less chance of war with North Korea," said Nathan Thooft, senior managing director of Manulife Asset Management. "The broader fundamentals still look pretty good."
The gains came despite a monthly survey showing that confidence among German investors plunged in August, pointing to greater unease about Europe's biggest economy.
Some market watchers in the US were heartened by reports suggesting that the Trump administration was making headway on a tax reform plan. But the US was fairly quiet on the whole, a lull that benefitted stocks.
"We think market participants are simply cheered by the fact that there isn't any prevailing sense of negativity in the news this morning; hence, they see an opening to try their hand at buying the dip that has dented the major indices in recent weeks," said Briefing.com analyst Patrick O'Hare.
- Euro pulls back -
The dollar advanced against the euro, which pulled back following the weak German data. Investors are also looking ahead to Friday's summit of central bankers at Jackson Hole, Wyoming, which will included speeches by ECB chief Mario Draghi and Federal Reserve Chair Janet Yellen.
"The euro appreciated significantly this year and it is this very strength that makes investors nervous about how hawkish ECB President Draghi will sound at Jackson Hole," said Kathy Lien, managing director at BK Asset Management.
Among individual stocks, Dow member Chevron rose 0.6 percent after the Wall Street Journal reported that chief executive John Watson plans to announce he will step down next month. The front-runner to replace him is executive vice president Mike Wirth, but the plan has not been finalized and could still change, said the newspaper, citing unnamed sources.
British subprime lender Provident Financial lost a whopping 67.3 percent of its value after it issued a bleak financial forecast, suspended its dividend, said it was under investigation by the Financial Conduct Authority and that chief executive Peter Cook had resigned.
Brazilian state power utility Electrobras surged nearly 50 percent after the government announced privatization plans, helping to lift the broader Ibovespa two percent to 70,011, its highest level since January 2011.
Comments
Comments are closed.