Asian stocks rebounded from their worst day since the aftermath of the Brexit vote. European equities also gained but the pound continued to retreat with the Bank of England expected to cut interest rates at today’s monetary policy meeting.
The Stoxx Europe 600 Index gained with mining shares and energy producers driving the Asian index up from its lowest level since June 24, the day when referendum results showed Britain had decided to leave the European Union.
U.S. crude extended gains into a second session after the steepest drop in American gasoline supplies since April softened concern over a possible glut. The greenback was up before Friday’s jobs data and metals declined amid concern about increased supply from China.
The European index rose 0.5 percent as of 8:07 a.m. in London while the MSCI Asia Pacific Index gained 0.6 percent, following last session’s 1.9 percent slide, jumping 5.8 percent in July still down about 1 percent this week. The Topix index climbed 0.9 percent as the yen reversed some of its recent advance.
Global Economies Still Weak
Global attempts to bolster confidence in the world economy have proven inadequate and the slight recovery at the end of July has already petered out. Japan’s recent monetary and fiscal stimulus haven’t had their intended effect and there is continued concern that the plans won’t be enough to revive price growth.
The BOE is expected to cut benchmark interest rates Thursday, while non-farm payrolls data in the U.S. Friday could provide clues for Federal Reserve policy.
According to Sharon Zollner, a senior economist in Auckland at ANZ Bank of New Zealand Ltd., “The reality is that interest rates remain at record-low levels and, in an environment of moderate growth and low inflation that is supportive of higher-yielding assets and Asia-Pacific markets should continue to benefit, as long as the growth picture holds together.”