US strength helps markets to rally
MOST global markets have settled after last week’s chaos. The United States and Europe rallied and Asian markets began to make some gains after more selloffs earlier this week.
Forsyth Barr broker Suzanne Kinnaird said healthy early earnings reports in the US and Europe assisted the rally.
‘‘Global equity markets mostly snapped a shaky recovery from last week’s losses,’’ she said.
US investor sentiment was driven by the higher US Treasury bond rates, as investors opted to sell off shares in favour of bonds, plus the ongoing uncertainty of USChina trade relations.
Craigs Investment Partners broker Peter McIntyre said US shares soared on Tuesday, following strong quarterly results, sending the Dow Jones Industrial Average up more than 540 points, or 2.2%, with gains across the entire market
The US dollar held near a twoweek low and the 10year Treasury bond yield traded around 3.15%, as economic data showed US factory production had expanded in September, he said.
Wall Street’s three major indexes tallied their biggest oneday percentage gains since March, on Tuesday’s closing. The Dow Jones Industrial Average rose by 2.17%, the S&P 500 was up 2.15% and the Nasdaq Composite was up 2.89%.
The financial sector provided good support for the Dow Jones. Investment bank Morgan Stanley was up 5.2% and Goldman Sachs stock up 2.4%.
The technology sector gained 3% while healthcare rose 2.9%, those two sectors having led the S&P 500’s advance this year.
Mrs Kinnaird said Asian stocks were mixed, but were partly reversing the broad selloff at the start of the week.
Japan’s Topix closed up 0.7% on Tuesday, Hong Kong’s Hang Seng gained 0.1%, the South Korean Kospi was flat and the Shanghai Composite was down 0.8%. — Additional reporting: Reuters