Stock markets are never 100% predictable. But most analysts watching the global markets could not have foreseen the volatility that has occurred these past few days with colossal swings up and down that have left investors flummoxed as to where to turn.
After a two-week sell off that erased $8 trillion from global share markets, today’s rebound can give a modicum of hope to market bulls. U.S. equities registered the biggest gain in four years, with the Dow Jones climbing 619 points.
Asian and European markets immediately followed Wall Street’s lead.
China's Shanghai Composite index posted its biggest one-day percentage gain in nearly two months closing up 5.4 percent to reclaim the critical 3,000 mark while the MSCI Asia Pacific Index rose 1.3 percent, bringing its two-day advance to 2.9 percent.
Japan’s Topix index capped its biggest two-day increase in nine months and the benchmark Nikkei 225 was up 1.1 for the day. Jakarta stocks jumped 3.3 percent, the most since 2013.
Australia's S&P ASX 200 index was up and South Korea's Kospi index held firm at a one-week high, a day after posting its biggest single-day rise in two years.
In Europe, the Euro Stoxx 50 Index futures climbed 1.57% to 3,110.50. Futures for Germany's DAX 30 index added 2.01% to 9,758.80, while futures for the UK FTSE 100 index advanced 1.48% to 5,955.30a and French CAC 40 futures gained 2.58% to 4,421.70.
US Rallies
The Wall Street rally Wednesday brought to an end the selloff that began with China’s currency devaluation on August 11th.
The Nasdaq Composite led gains with a rise of 4.24 percent while the blue-chip Dow Jones Industrial Average and S&P 500 climbed 3.95 and 3.90 percent respectively. The S&P 500 showed its steepest increase since November 2011, with technology stocks and health care shares providing the major push.
Still, investors remain jittery on market volatility and await a Fed interest rate decision. According to New York Federal Reserve President William Dudley, “… a rate hike in September (now) seems 'less compelling' in light of market volatility and foreign developments."
