Recovery signs raise world stocks to 11-month high
Brightening signs of a global economic recovery pushed world equities to new 11-month peaks on Wednesday, with more and more investors joining the rush to sell low-yield dollars in favour of growth-oriented stocks and commodities.business Updated: Sep 17, 2009 00:40 IST
Brightening signs of a global economic recovery pushed world equities to new 11-month peaks on Wednesday, with more and more investors joining the rush to sell low-yield dollars in favour of growth-oriented stocks and commodities.
Germany’s DAX rose 0.9 per cent, Britain’s FTSE 100 gained 1.1 per cent and France’s CAC-40 rose 1.1 per cent.
In Asia, India’s Sensex climbed 1.35 percent, Japan’s benchmark Nikkei 225 index gained 0.5 percent, Hong Kong’s Hang Seng was up 2.6 per cent, Korea’s Kospi by 1.8 percent and Taiwan’s benchmark rose 1.3 percent.
Optimism about the world’s largest economy was supported by data showing US retail sales jumped in August by the biggest amount in three years.
Adding to the mood, Fed Chairman Bernanke declared America’s worst recession since the 1930s is “very likely over”.
“Overall the tone looks like it will be positive,” said Mitul Kotecha, analyst at Calyon.
Despite signs of a turnaround, recovery may be difficult to sustain in coming quarters, analysts said. Tim Schroeders, a fund manager at Pengana Capital Ltd. in Melbourne, said Asian markets could see a 10 per cent decline later this year. “I think the markets have run ahead of the economy for the time being,” he added.
The optimism boosted oil to around $71 a barrel, while gold hit an 18-month high.
As investors turned to riskier assets, the dollar fell to a one-year low.