New Month, New Optimism?
Asian markets were broadly higher on Thursday after a second consecutive day of impressive gains on Wall Street and a solid run of earnings reports restored investor confidence. Hong Kong’s Hang Seng Index led the gains in Asia, heading 1.84 percent higher as of 2:07 p.m. HK/SIN. The Shenzhen Composite was up 1.31 percent while the Shanghai Composite managed to rain 0.53 percent. South Korea’s Kospi and Australia’s ASX 200 were both up 0.17 percent. Only Japan’s Nikkei 225 bucked the trend, easing 1.12 percent by the mid-afternoon.
On Wednesday, the NASDAQ closed just over 2 percent higher. The Dow Jones Industrial Average closed 0.97 percent higher. The S&P 500 ended the day 1.09 percent higher. The recent volatility in the U.S. stock markets has caused traders to ponder whether the recent dips were just a (long-expected) correction, or whether the selloffs were the start of an impending bear market. Despite several days of recovery, October was still difficult for the U.S. stock markets. The S&P 500 erased 1.91 trillion of value in October, reports CNBC, with the losses spreading across all industry sectors. The month was the worst month for the index since September 2011. There is hope however- October is known for being a historically volatile month, and many traders have renewed optimism that the recent movements were cyclical rather than a true sign of market sentiment.
On the currency markets, the dollar index eased after several days of strong gains, falling 0.25 percent to 96.89 .DXY. The dollar was pressured by a steep gain for the pound, which was trading 0.60 percent higher against the greenback in the mid-afternoon in Asia, to $1.2843. The pound jumped following reports that UK Prime Minister Theresa May has struck a deal relating to financial services with Brussels, after months of struggling with the issue.
The dollar also declined slightly against the yen, trading down 0.11 percent to 112.81. IT was down 0.07 percent against the Canadian dollar.