Hopes for new China stimulus supported rally of equities, stocks worldwide
ALBAWABA – Stocks worldwide rallied on Wednesday as markets bounced on softer-than-expected United States (US) jobs data and hopes that new China stimulus would further bolster Asia markets.
Agence France-Presse (AFP) reported a surge in Wall Street as shares of big companies, including Amazon and Apple, rose on promising labor market data.
Figures of the US Labor Department's closely followed Job Openings and Labor Turnover Summary (JOLTS) fell well below forecasts, according to AFP.
Notably, a cooler labor market indicates lower inflation rates and reaffirms the success of the Federal Reserve’s mission to bring down inflation. This means the central bank is less likely to introduce further rate hikes.
So far, the JOLTS report estimates over 8.8 million layoffs in the US, which is 70 percent above the long-term average, with job opening down to a 28-month low, AFP reported.
On the Asian front, the trading mood brightened further in Shanghai and Hong Kong as well, driven by news that China’s biggest state-backed banks are planning to slash rates on mortgages and deposits.
New China stimulus drove stocks worldwide and in Asia on prospects of regaining economic growth - Shutterstock
Several new China stimulus were presented in the past few months to help rejuvenate the country’s flagging economy, including rate cuts and sector-specific credit facilities to support growth.
The Hang Seng Index rose as much as 1.4 percent, with markets in Tokyo, Sydney, Seoul, Singapore, Taipei, Manila and Jakarta all up as well earlier on Wednesday.
However, the MSCI Asia Pacific Index slipped slightly below its recent high soon after as the strong rally in Chinese equity markets gradually lost steam, according to Bloomberg.
Australia’s S&P/ASX 200 rose 1.2 percent and the Euro Stoxx 50 futures rose 0.3 percent, the New York-based news agency reported.
Asia, US markets lead rally as stocks worldwide rise on optimism
Nearly 90 percent of the S&P 500 companies rose as the gauge closed just shy of 4,500, Bloomberg reported. A rally in megacaps like Tesla Inc. and Nvidia Corp. sent the Nasdaq 100 up more than 2 percent.
More so, a decline in the yield of US treasury bonds supported growth stocks, as reported by Reuters, with Nvidia stocks climbing 4.2 percent to close at its highest ever.
Tesla also rallied 7.7 percent, leading the turnover on Wall Street, along with Nvidia, with over $33 billion traded in each stock, according to Reuters.
Likewise, Alphabet received a 2.7 percent boost from a swath of fresh artificial intelligence technology and partnerships unveiled by the Google parent.
Prospects of no more interest rate hikes, combined with a weaker US dollar and lower treasury yields, all boosted US markets - Shutterstock
The S&P 500 climbed 1.45 percent to end the session at 4,497.63 points and the Nasdaq gained 1.74 percent to 13,943.76 points, while the Dow Jones Industrial Average rose 0.85 percent to 34,852.67 points.
All 11 S&P 500 sector indexes rose, with communication services up 2.46 percent and consumer discretionary rising 2.35 percent.
Catalent jumped almost 5 percent, while Verizon and AT&T each gained more than 3 percent after Citi upgraded the telecom companies to "buy" from "neutral".
Additionally, US-listed shares of Chinese e-commerce firm PDD Holdings rallied over 15 percent after the firm beat second-quarter revenue estimates, Reuters reported.
Overall, in the US, the S&P 500 posted 21 new highs and two new lows; the Nasdaq recorded 52 new highs and 115 new lows.
Market summary by AFP and Bloomberg:
S&P 500 futures rose 0.1 percent as of 6:47 a.m. London time.
The S&P 500 rose 1.5 percent
Nasdaq 100 futures rose 0.1 percent.
The Nasdaq 100 rose 2.2 percent
Japan’s Topix rose 0.4 percent
Australia’s S&P/ASX 200 rose 1.2 percent
Hong Kong’s Hang Seng rose 0.5 percent
The Shanghai Composite was little changed
Euro Stoxx 50 futures rose 0.3 percent
Tokyo - Nikkei 225: UP 0.9 percent at 32,529.72 (break)
Hong Kong - Hang Seng Index: UP 1.1 percent at 18,676.47
Shanghai - Composite: UP UP 0.4 percent at 3,147.04
New York - Dow: UP 0.9 percent at 34,852.67 (close)
London - FTSE 100: UP 1.7 percent at 7,464.99 (close)
