Global markets have gyrating for months now, and with no sign that the European debt issues will be resolved any time soon, they are likely to remain volatile for the foreseeable future. The feeble state of the U.S. economy and moderating expansion in growth engines like China and India also have compounded the global nervousness.
For the time being, however, the mood has flipped toward the positive, with stock markets in much of Asia rising well over 2 percent on Thursday, and futures pointing to gains in Europe once trading begins.
The Nikkei 225 index closed 1.7 percent higher, and the Taiex in Taiwan rallied 2 percent. In South Korea, the Kospi index finished up 2.6 percent, and the S. P./ASX 200 in Australia gained 3.7 percent.
In Hong Kong, which had been closed for a holiday on Wednesday, the Hang Seng surged 4.7 percent by midafternoon. The mainland Chinese market was closed for a weeklong holiday.
Investors eagerly awaited signs that the European Central Bank could initiate steps to support the beleaguered European economy and financial sector at its monthly policy meeting later on Thursday.
While few economists expect the central bank to lower interest rates outright, other potential tools include purchases of secured debt issues by banks, for example, or an extension of low-interest lending to strapped institutions.
Asian stock markets have been tracking the ups and downs of the U.S. and European markets for months, and Thursday was no exception.
On Wall Street, the Dow Jones industrial average and the Standard Poor’s 500 had ended Wednesday with gains of 1.2 percent and 1.8 percent, respectively.
Investors were encouraged by a report by the Institute for Supply Management that showed that nonmanufacturing businesses continued to grow in September.
Longer term, however, the picture remains as murky as ever, and financial markets continue to face what strategists at HSBC, in their latest quarterly assessment on Thursday, called “an unbearable degree of uncertainty.”
“After falling 22 percent from their April highs, global equities are likely to remain tricky,” Garry Evans, head of global equity strategy at the bank in Hong Kong, wrote. “There are few signs of a bold solution to Europe’s sovereign debt issues and the 23 November deadline for U.S. debt negotiations looms.”
Moreover, he added, economic growth prospects have not bottomed. Although the jury is still out on whether the world will actually tip into another recession, markets will continue to fret that it might, he said.
Article source: http://feeds.nytimes.com/click.phdo?i=bbd96b40082915b40303c82b7ffacf2b
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