After Janet Yellen, nominated to be the next chairman of the Federal Reserve, indicated that the U.S. economy must improve before monetary stimulus is pared, European stock-index futures advanced to a great extent. Thus, cutting short the losses in the two days earlier, European stocks fared better yesterday.
European Stocks Fared Better
Whereas futures on the Euro Stoxx 50 Index expiring in December went up by one percent and closed at 3,044 at 8:12 a.m. in London, the trend was followed by the Stoxx Europe 600 Index that too rose for five straight weeks even though the European Central Bank earlier unexpectedly lowered its key interest rate.
Even contracts on the U.K.’s FTSE 100 Index (UKX) performed higher and added 0.7 percent on the day. There was a better trading day for the Standard & Poor’s 500 Index futures that rose 0.3 percent, while the MSCI Asia Pacific Index gained 1 percent.
Following the trend Asian trade started on the bright side and bounced higher. Investors are buying shares amidst the indication that the U.S. central bank won’t reduce its economic stimulus until March next year or later. Several of the investors who are bullish believe that her stand has made it clear that there would not be any tapering of stimulus in the next six month.
Asian Stocks Faring Better after Yesterday’s losing Trade
Whereas Tokyo’s Nikkei 225 surged 2.5 percent to 14,929.58, the trend was followed by South Korea’s Kospi which went up by 0.6 percent to 1,975.93. In a similar fashion, China’s Shanghai Composite went up by 0.5 percent and reached to 2,097.38 in a bright trading day even after their leaders could not find out a way how to increase private participation in the economy.
Among other regional stocks, Hong Kong’s Hang Seng gained 0.9 percent to reach 22,660.44. The trend was followed by Australia, Taiwan and Singapore where stocks increased to an extent and sent positive signals among traders.
The U.S. Stock Market Saw Positive Growth
Positive indications from the would be head of the Fed also prompted investors in the U.S. to buy shares and on a bright trading day the Standard & Poor’s 500 index rose 0.8 percent to 1,782, which is its 34th record close this year so far. Similarly, the Dow Jones industrial average gained amidst the positive trend in the U.S. stocks and increased by 0.5 percent to 15,821.63.
To contact the reporter of this story: Jonathan Millet at firstname.lastname@example.org