China’s key stock market index surged 5.3 per cent today, its biggest gain in eight weeks, as markets across Asia rose following Wall Street’s rebound, giving investors some relief after gut-wrenching global losses.
The Shanghai Composite Index, whose steep drop in recent days triggered worldwide selling, gained 5.3 per cent to close at 3,083.59 points, bouncing back from losses that wiped some 20 per cent off its value over the past week. It was the biggest one-day gain since a 5.5 per cent rise on June 30.
Elsewhere in Asia, Hong Kong’s Hang Seng rose 2.9 per cent to 21,697.31 and Tokyo’s Nikkei 225 added 1.1 per cent to 18,574.44. Sydney’s S&P ASX 200 advanced 1.2 per cent to 5,233.30 and Seoul’s Kospi gained 0.7 per cent to 1,908.00. Markets in Singapore, Bangkok, New Zealand and Jakarta also rose.
European markets also advanced in early trading. France’s CAC-40 added 2.1 per cent to 4,597.36 and Germany’s DAX gained 2.4 per cent to 10,240.92.
The gains came after Wall Street rocketed up overnight. The Dow Jones industrial average soaring more than 600 points, or 4 per cent. That was its third-biggest point gain of all time and its largest since October 28, 2008.
Traders were encouraged by comments from William Dudley, president of the New York Federal Reserve Bank, that the case for a US interest rate hike in September is “less compelling to me than it was a few weeks ago,” given China’s troubles, falling oil prices and weakness in emerging markets.
“Traders took the cue to buy,” said Nicholas Teo of CMC Markets in a report.
Following a six-year run-up in US stocks that has pushed major indexes to all-time highs, investors worry the economy could falter if the Fed raises rates too soon.
US markets looked set for more gains, with futures for the Dow Jones and S&P both up 0.4 per cent.
In currency markets, the dollar rose to 120.2220 yen from yesterday’s 120.1440 yen. The euro edged down to USD 1.1327 from the previous session’s USD 1.1337.
Benchmark US crude gained 92 cents to USD 39.53 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 71 cents yesterday to close at USD 38.60. Brent crude, used to price international oils, rose USD 1 to USD 44.14 in London after losing 7 cents the previous day to close at USD 44.14.