The dollar held onto its gains and stocks climbed yesterday as strong concern over North Korea’s missile test faded, while oil prices shot higher.
“Equities remain in rebound mode, extending their bounces as relative geopolitical calm and positive macro data” in China, the United States and the eurozone “fuels fresh risk taking by investors,” said Mike van Dulken, head of research at Accendo Markets.
London closed 0.9% higher at 7,430.62 points, followed by a 0.6% gain at 5,085.59 points in Paris and 0.4% rise at 12,055.84 points in Frankfurt. The EURO STOXX 50 closed 0.7% up at 3,427.32 points.
The gains were more modest on Wall Street, with the Dow up 0.2% nearing midday.
“In light of the devastation wrought this week in Texas by Hurricane Harvey, and the provocative missile launch by North Korea, it’s a testament to the underlying bullish bias that the stock market has fared as well as it has,” said Patrick O’Hare of Briefing.com
But one notable heavy loss among individual companies was French supermarket giant Carrefour.
Its share price dived 13% in Paris after the group published disappointing results for the first half and warned of a drop in earnings for the whole year.
The dollar was mostly holding onto gains made Wednesday, when the US Commerce Department reported on Wednesday the world’s largest economy expanded a forecast-beating 3% in the second quarter.
“The greenback still seems to be benefiting from yesterday’s better than forecast second-quarter GDP reading,” said Spreadex analyst Connor Campbell.
The data revived speculation that the Federal Reserve could consider lifting US interest rates for a third time this year, and the attention of investors is now shifting to the release of US jobs figures today.
“So, it is now all down to Friday’s official nonfarm payrolls report,” said market analyst Fawad Razaqzada at Forex.com.
In Asian trade, the weak yen supported Japanese exporters, with Tokyo’s Nikkei ending 0.7% higher, while Sydney added 0.8% and Singapore gained 0.5%.
Wellington and Taipei were also higher.
However, Shanghai dipped 0.1% as official figures showed a rise in Chinese factory activity in August but not strong enough to ease concerns about the world’s number two economy, which is growing at its slowest pace in more than a quarter of a century.
Hong Kong eased 0.4%, with profit-takers also moving in after enjoying six days of gains in the previous seven trading days.
On oil markets, both main crude contracts shot higher after having slid this week on the impact of Hurricane Harvey, which has forced the temporary closure of dozens of refineries in the crude-rich Gulf of Mexico, thus depressing the demand for crude.