European and US stock markets rallied yesterday on easing concerns about global economic powerhouse China despite further volatility as well as a modest uptick in crude oil.
Frankfurt and Paris indices rose 1.6% and 1.5%, respectively, with London not far behind with a gain of 1%.
Analysts said a rise in the value of the Chinese yuan helped bouy the European indices after its devaluation rattled global markets in the New Year.
“Asian stocks were mostly lower, even as mainland Chinese stocks ticked higher on stability in the yuan, but European equities are rising on the rebound in crude oil and some upbeat corporate results,” financial analysts Charles Schwab said in a note to investors.
In foreign exchange, the euro dipped to $1.0834.
Off the back of Europe’s cheer, the Dow Jones index rose in early trading but then fell back to trade flat, with the Nasdaq rising 0.6% at around 1645 GMT.
By late yesterday, oil prices rebounded slightly from 12-year lows seen earlier in the session.
Crude futures have been sliding in recent months on a chronic global oversupply of crude, prompting Opec member Nigeria Tuesday to call for an emergency meeting to address the collapsing market.
New York’s benchmark West Texas Intermediate for February delivery stood at $30.65, off a $30.41 low, its weakest level since December 3, 2003.
And Europe’s Brent North Sea crude for February stood at $30.95, having earlier dived to $30.43, a point last seen on April 6, 2004.
Nigerian petroleum resources minister Emmanuel Ibe Kachikwu declared that he expects an extraordinary meeting of the oil cartel in “early March”.
Despite the modest upturns, analyst James Hughes of GKFX warned against assumptions that oil would not yet slip further.
“In this current climate it is absolutely impossible to predict the low for this oil price, currently it’s a case of holding on for dear life.
“Any of those calling a bottom at these levels are much braver than me!” he said in an analyst’s note.
Underscoring the uncertainty, British energy major BP announced that it would axe more than 4,000 jobs worldwide over the next two years in response to the collapsing oil prices.
London-listed energy giant BP had already slashed 4,000 jobs last year as it prepared for a prolonged period of low prices.
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