NEW YORK, Aug 31 — Global stocks regained composure yesterday, taking heart after US President Donald Trump’s comparatively restrained response to this week’s missile launch by North Korea.
European exchanges followed their Asian counterparts higher after overnight Wall Street gains. And New York was boosted by rosy economic data on growth and job creation, overcoming worries about Hurricane Harvey for now.
Markets had been rocked Tuesday after nuclear-armed North Korea fired a missile into Japanese airspace.
Adam Sarhan of 50 Park Investments told AFP yesterday’s gains were a “relief rally.”
Investors were comforted that Washington offered a more measured response to this week’s nuclear provocations from North Korea.
“The market is cautiously optimistic but remains cognisant of the fact that we are on bad headline away from a nasty decline,” he said.
Harvey still hurting oil
The US Commerce Department reported the world’s largest economy expanded by 3 per cent in the second quarter, far faster than originally estimated — and hitting a target set by the White House.
The payrolls firm ADP also reported robust private job creation for the month with 237,000 new positions added.
The tech-heavy Nasdaq rose more than one percent, lifted by higher shares for video streaming service Netflix and iPhone-maker Apple, with shares hitting a record high on optimism about the next product launch.
The broader S&P 500 rose 0.5 per cent but the Dow was held down by flagging oil stocks, still suffering from Hurricane Harvey’s assault on refining capacity.
London closed 0.4 per cent higher, with Paris and Frankfurt gaining 0.5 per cent.
Seoul stocks — which shed 0.2 per cent Tuesday — added 0.3 per cent, Tokyo advanced 0.7 per cent and Hong Kong rallied 1.2 per cent.
Oil prices slid yesterday on fears of a long-term shutdown of refining capacity in the oil-rich Gulf Coast region due to Harvey, which will dampen demand for crude.
“WTI and Brent Crude oil price continue to be weak as demand at refineries is down due to disruption caused by the tropical storm in the US,” said market analyst David Madden at CMC Markets UK.
“Also playing in the refinery story is the high stockpiles of oil the US has encountered through much of this year, refineries are working their way through existing stockpiles rather than bringing in more,” he added.
Key figures around 2100 GMT
New York – Dow: UP 0.1 per cent at 21,892.08 (close)
New York – S&P 500: UP 0.5 per cent at 2,457.57 (close)
New York – Nasdaq: UP 1 per cent at 6,368.31 (close)
London – FTSE 100: UP 0.4 per cent at 7,365.26 points (close)
Frankfurt – DAX 30: UP 0.5 per cent at 12,002.47 (close)
Paris – CAC 40: UP 0.5 per cent at 5,056.34 (close)
EURO STOXX 50: UP 0.5 per cent at 3,403.71 (close)
Tokyo – Nikkei 225: UP 0.7 per cent at 19,506.54 (close)
Hong Kong – Hang Seng: UP 1.2 per cent at 28,094.61 (close)
Shanghai – Composite: DOWN 0.1 per cent at 3,363.63 (close)
Euro/dollar: DOWN at US$1.1882 from US$1.1974 at 2100 GMT on Tuesday
Pound/dollar: UP at US$1.2924 from US$1.2919
Dollar/yen: UP at ¥110.29 from ¥109.75
Oil – Brent North Sea: DOWN US$1.14 at US$50.86 per barrel
Oil – West Texas Intermediate: DOWN 48 cents at US$45.96 — AFP