Gains have been underpinned by the announcement of further significant stimulus measures in China, as the government increases its efforts to meet its growth targets for 2024 and beyond. Upbeat economic data in the United States also helped stocks on Wall Street extend their September rally, and reports that Saudi Arabia is considering abandoning its unofficial $100-a-barrel price target for crude led to an easing of oil prices later in the week, despite growing tensions in the Middle East.
Global stock markets made solid advances this week, as a slew of positive news drove share prices higher.
Gains have been underpinned by the announcement of further significant stimulus measures in China, as the government increases its efforts to meet its growth targets for 2024 and beyond. Upbeat economic data in the United States also helped stocks on Wall Street extend their September rally, and reports that Saudi Arabia is considering abandoning its unofficial $100-a-barrel price target for crude led to an easing of oil prices later in the week, despite growing tensions in the Middle East.
United States
On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 0.3% up for the week so far, with the S&P 500 gaining 0.8% to reach yet another all-time high. Better-than-expected trading statements from firms in the technology sector were well received by investors, while the news of a fall in unemployment claims helped ease fears about the health of the US economy. However, there were signs of nervousness in the run-up to November’s presidential election, with surveys showing a decline in both business and consumer confidence this month.
UK
In the UK, the FTSE 100 closed on Thursday 0.7% up for the week so far. This came as news of China’s stimulus drove commodities prices higher, boosting London-listed mining companies. A fall in oil prices later in the week following suggestions that Saudi Arabia would increase output led to weakness among major energy companies. Data for September indicated that uncertainty among businesses ahead of next month’s budget had hit output, although the OECD upgraded its growth forecast for the UK economy on the basis of falling interest rates and the return of inflation to its target level.
Europe
In Frankfurt, the DAX index ended Thursday’s session up 2.8% for the week, while France’s CAC 40 gained 3.2%. The high level of exposure of many European firms to the Chinese market was reflected in these advances, with strong share price rises recorded among the likes of luxury goods and motor manufacturers. The strong stock market performance came despite further gloomy economic reports, with latest figures showing a decline in eurozone output for the first time since the start of the year. There was also a fourth consecutive monthly fall in business confidence in Germany.
Asia
In Asia, the Hang Seng index in Hong Kong surged 9.1% after ministers in Beijing unveiled one of their largest stimulus packages since the pandemic hit in early 2020. A reduction in capital reserve requirements should help to boost bank lending, while the Chinese government is planning a huge sale of public debt. Japan’s Nikkei 225 index of leading shares, meanwhile, advanced 3.2% and benefitted significantly from the news from China. Bank of Japan officials indicated that they would be unlikely to raise interest rates again until after the publication of October’s inflation data in November, providing another boost for stocks in Tokyo.
Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 26 September 2024.