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| World stock markets bounce back after turbulent week | World stock markets bounce back after turbulent week |
| (about 3 hours later) | |
| European and Asian stock markets have bounced back at the end of a tumultuous week, as oil prices recovered and the European Central Bank president, Mario Draghi, raised hopes of further stimulus measures. | |
| It was a week that involved panic selling in global markets, pushing several of them, including London and Japan, into bear market territory, as oil prices tumbled to 13-year lows below $28 a barrel and further intensified fears over the health of the global economy. | It was a week that involved panic selling in global markets, pushing several of them, including London and Japan, into bear market territory, as oil prices tumbled to 13-year lows below $28 a barrel and further intensified fears over the health of the global economy. |
| Related: ECB stimulus hint steadies markets | Related: ECB stimulus hint steadies markets |
| On Friday, however, Japan’s Nikkei rallied nearly 6%, its biggest one-day gain in four and a half months, helped by a weaker yen and speculation that the Bank of Japan could unveil new stimulus measures at its meeting next week. | On Friday, however, Japan’s Nikkei rallied nearly 6%, its biggest one-day gain in four and a half months, helped by a weaker yen and speculation that the Bank of Japan could unveil new stimulus measures at its meeting next week. |
| In Europe, Draghi hinted that the ECB was ready to inject fresh stimulus into the eurozone at the March meeting – sooner than many investors had been expecting. | In Europe, Draghi hinted that the ECB was ready to inject fresh stimulus into the eurozone at the March meeting – sooner than many investors had been expecting. |
| The comments pulled European markets off their lows on Thursday afternoon, and gave them a further boost on Friday, with the FTSE 100 index in London gaining nearly 100 points, or 1.7%, to 5872.74 in early trading. Germany’s Dax and France’s CAC were both up 1.8% and Spain’s Ibex rose 2%. | The comments pulled European markets off their lows on Thursday afternoon, and gave them a further boost on Friday, with the FTSE 100 index in London gaining nearly 100 points, or 1.7%, to 5872.74 in early trading. Germany’s Dax and France’s CAC were both up 1.8% and Spain’s Ibex rose 2%. |
| Michael Hewson, chief market analyst at CMC Markets UK, said: “There now remains the very real possibility that we could well finish the week in positive territory, and if that happens it would be a remarkable turnaround after Wednesday’s carnage.” | Michael Hewson, chief market analyst at CMC Markets UK, said: “There now remains the very real possibility that we could well finish the week in positive territory, and if that happens it would be a remarkable turnaround after Wednesday’s carnage.” |
| Brent crude rebounded more than 5%, rising to $30.81 a barrel, helped by comments from Saudi Arabia, the world’s top oil producer. US crude rose 3.6% to $30.58 a barrel. Khalid al-Falih, the chairman of state-owned oil company Aramco, said at the World Economic Forum in Davos that current prices were “irrational”. | Brent crude rebounded more than 5%, rising to $30.81 a barrel, helped by comments from Saudi Arabia, the world’s top oil producer. US crude rose 3.6% to $30.58 a barrel. Khalid al-Falih, the chairman of state-owned oil company Aramco, said at the World Economic Forum in Davos that current prices were “irrational”. |
| He told an energy panel: “The market has overshot on the low side and it is inevitable that it will start turning up. I bet at the end of the year it will be higher than where we are now.” However, he also added, “short term it is a very bleak picture”. | |
| The Nikkei closed 5.9% higher at 16,958.53, recouping most of the heavy losses experienced over the past two days. However, it was still down 1.1% over the week, the third week running that the index has fallen. | The Nikkei closed 5.9% higher at 16,958.53, recouping most of the heavy losses experienced over the past two days. However, it was still down 1.1% over the week, the third week running that the index has fallen. |
| Traders said international investors such as hedge funds and oil funds were buying shares again, but warned that it was too early to call the bottom of the market. | Traders said international investors such as hedge funds and oil funds were buying shares again, but warned that it was too early to call the bottom of the market. |
| All major markets in Asia Pacific joined in the rally, with Hong Kong’s Hang Seng index gaining 3.2% and the Straits Times in Singapore rising 2.3%. Australia’s stock market closed 1.1% higher. | All major markets in Asia Pacific joined in the rally, with Hong Kong’s Hang Seng index gaining 3.2% and the Straits Times in Singapore rising 2.3%. Australia’s stock market closed 1.1% higher. |
| In China, the benchmark Shanghai Composite index rose 1.2% on Friday and ended the week slightly higher than it began for the first time this year, edging up 0.5%. The CSI 300 index of the largest listed companies in Shanghai and Shenzhen closed up 1%, leaving it down 0.2% over the week. | In China, the benchmark Shanghai Composite index rose 1.2% on Friday and ended the week slightly higher than it began for the first time this year, edging up 0.5%. The CSI 300 index of the largest listed companies in Shanghai and Shenzhen closed up 1%, leaving it down 0.2% over the week. |
| The Chinese vice-president, Li Yuanchao, sought to reassure investors that Beijing would act to prevent volatility in a market that was “not yet mature”. | |
| “An excessively fluctuating market is a market of speculation where only the few will gain the most benefit when most people suffer,” Li told Bloomberg in Davos. | “An excessively fluctuating market is a market of speculation where only the few will gain the most benefit when most people suffer,” Li told Bloomberg in Davos. |
| China’s labour ministry aired some good news, announcing that urban unemployment remained unchanged at 4.05%, well below the government’s target, and predicted that the job market would remain stable this year. However, most economists believe China’s real jobless rate is far higher. | China’s labour ministry aired some good news, announcing that urban unemployment remained unchanged at 4.05%, well below the government’s target, and predicted that the job market would remain stable this year. However, most economists believe China’s real jobless rate is far higher. |
| Concerns about a further devaluation of the yuan in the near term have also faded. | Concerns about a further devaluation of the yuan in the near term have also faded. |