Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Money / Global markets surge on upbeat growth prospects
BackBack

Global markets surge on upbeat growth prospects

Global markets surge on upbeat growth prospects

Premium

London: Stock markets around the world sprinted ahead on Thursday on signs of robust economic momentum in Asia and Europe that also helped bolster the euro against the dollar.

The rally got under way early in the day in Asia where investors took heart from news that the Japanese economy eclipsed expectations and grew 5.0% in the first quarter and that Chinese exports surged in May.

A later upward revision to its euro zone 2010 growth forecast by the European Central Bank, from 0.8 to 1.0%, helped sustain the trend.

After a strong showing in Asia, where Tokyo, closed with a gain of 1.10%, stocks took off in Europe.

The London FTSE 100 index rose 0.92% to close at 5,132.50 points while the CAC 40 in Paris added 2.03% to finish at 3,516.64. The Frankfurt the DAX rose 1.20% to 6,056.59 points.

Elsewhere there were gains of 3.72% in Madrid, 2.53% in Milan, 1.49% in Amsterdam and 0.91% on the Swiss Market Index.

Late-day market sentiment was positively affected by a statement from the head of the European Central Bank, Jean-Claude Trichet, that austerity plans adopted by several debt-dogged euro zone nations were not likely to snuff out growth.

In fact, the bank said, the euro zone should grow faster this year than had been foreseen until now.

“The market came to realise that in the short term the picture is not as bleak as it had thought," said one Paris trader.

On Wall Street stocks rebounded sharply from the previous day’s slump on gains in Japan’s growth pace and Chinese exports.

The Dow Jones Industrial Average at mid-day was up 2.39% at 10,127.26 while the tech-rich Nasdaq index had risen 2.09% to 2,203.95.

“The bulls are finding some energy from a plethora of stronger-than-expected economic reports out of Asia, which is helping overshadow a smaller-than-expected decline in US weekly initial jobless claims," Charles Schwab & Company analysts said in a note to clients.

China said its trade surplus soared in May on strong foreign demand for Chinese-made clothes and electronics as exports leaped 48.5% from a year ago.

In Japan, the government reported the world’s second-biggest economy grew 5.0% in the first quarter, faster than an initial estimate of 4.9%.

The positive economic news in Asia contrasted with a weaker-than-expected government report on the ailing US labor market.

Initial claims for unemployment benefits fell to 456,000 last week, more than the 450,000 expected by most analysts.

But investors appeared to shrug off the weekly jobless claims numbers and focus on the improved outlook for the global economy.

On the currency market, the seemingly brighter macroeconomic climate encouraged investors to venture out of the safe haven dollar and into riskier currencies, such as the euro.

The single European currency, which has been hammered in recent weeks on fears for the financial health of the debt-encumbered euro zone, rose to $1.2108 from $1.1975 on Wednesday.

“Risk appetite made a remarkable return to the equity market" and helped “push the single currency higher," said Frederik Ducrozet of Credit Agricole CIB.

The dollar was trading at 91.05 yen, up from 91.28. The pound was at 1.4672.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 11 Jun 2010, 12:06 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App