MSCI’s gauge of stocks across the globe climbed 1.01%, the DJIA advanced 1.48%, S&P 500 added 1.21%, Nasdaq Composite gained 1.04%, and STOXX 600 index advanced 0.93%
World stock markets rallied on Thursday and the U.S. dollar retreated from one-month highs as concerns faded about contagion from China Evergrande and as investors digested the Federal Reserve’s plans for reining in U.S. stimulus.
Wall Street’s main indexes closed at least 1% following solid advances in European markets.
MSCI’s gauge of stocks across the globe climbed 1.01%, its biggest percentage rise in a month and for a third straight session of gains that brought it all the way back from Monday, when it posted its biggest percentage drop in two months after fears linked to property group Evergrande.
It was a case of unwind of the fear from what happened in China. Markets got over-sold and pessimistic very quickly and then you have basically seen a buy-the-dip mentality, said Keith Lerner, co-chief investment officer at Truist Advisory Services.
Evergrande shares climbed 18% ahead of a key debt payment deadline.
Investors were still mulling implications from the Fed’s policy statement on Wednesday that it should begin reducing monthly bond purchases as soon as November and signalled interest rate increases may follow more quickly than expected.
In some ways, the Fed had prepared investors that they were going to taper and somehow just getting that news out there even if some people perceived it as more hawkish is like a sigh of relief, Lerner said.
On Wall Street, the Dow Jones Industrial Average advanced 506.5 points, or 1.48%, to 34,764.82, the S&P 500 added 53.34 points, or 1.21%, to 4,448.98 and the Nasdaq Composite gained 155.40 points, or 1.04%, to 15,052.24.
The pan-European STOXX 600 index advanced 0.93%.
Meanwhile, Norway’s central bank raised its benchmark interest rate and said it expects to hike again in December, joining a growing list of nations moving away from emergency-level borrowing costs. Norway’s crown strengthened versus the euro to its highest since mid-June.
In other currency trading, the dollar index dropped 0.428% after hitting a one-month high and the euro gained 0.45% to $1.1739. The Japanese yen declined 0.46% at 110.31 per dollar.
Sterling was last trading at $1.3722, up 0.71%, after the Bank of England (BoE) said two policymakers had voted for an early end to government bond buying and markets brought forward expectations of an interest rate rise to March.