October 10 saw major Asian and European stocks rise on a wave of risk appetite.
Another major factor that played a major role in the rise of European and Asian stocks was the US Federal Reserve’s optimistic outlook on bond yields.
US Treasury yields fell sharply on Tuesday, with Federal Reserve officials signaling that the central bank may be done raising interest rates. Fed Vice Chairman Philip Jefferson said the institution may “proceed cautiously” in determining whether any additional interest rate increases are necessary, while Dallas Fed President Lori Logan indicated that rising Treasury yields could prevent the Fed from… of doing so.
The early-week rush into supposedly safe assets such as the dollar, gold and government bonds cooled significantly on Tuesday, while oil prices also saw a pullback from Monday’s high.
The Asian stock market is regaining upward momentum led by Japan
The Asian stock market rose on Tuesday, led by bullish momentum in Japan. Japan’s benchmark Nikkei 225 index rose more than 2.4%, closing the day at 31,763.50 and leading stock gains in the region just one day after the country returned from a national holiday.
The rise in the Japanese benchmark index was driven by a rise in shares of oil and gas exploration company Inpex Corporation, which recorded the largest increase of 8.6%.
South Korea’s leading Kosdaq index fell 2.62% to close at 795 – its lowest level since March 16 – while the Kospi index reversed earlier gains to fall 0.26% to close at 2,402.58, its lowest level since March 21.
Hong Kong’s benchmark Hang Seng Index saw a 0.84% increase in the last hour due to hawkish comments from the Federal Reserve. On the other hand, mainland Chinese markets fell, with the CSI 300 index falling 0.75% to 3,657.13, marking the third straight day of losses.
European markets are seeing a bullish rally
Tuesday saw a significant rebound in European stocks due to dovish statements from US Federal policymakers, which boosted market sentiment.
The European STOXX 600 index rose 1.5 percent, approaching the largest percentage gain in one day in about four weeks. After oil prices rose, and with investors looking for refuge in Treasury bonds and gold, the index was on its way to recover from Monday’s 0.3% decline.
The UK’s benchmark FTSE 100 index rose to a one-week high on Tuesday on the Federal Reserve’s bullish trend and expectations that the Bank of England will delay raising interest rates. On the other hand, the more domestically focused FTSE 250 index rose 1.6%, while the global FTSE 100 index jumped 1.4%.
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