Global stocks surge to two-month highs
October 17, 2015, 5:02 pm

Chinese investors sighed relief as benchmark indices continued two-week streaks registering strong growth and partially reversing the summer’s losses [Xinhua]

On Friday, analysts were in consensus that global stocks were at their highest since the so-called Chinese Meltdown spawned a worldwide “Black Monday”.

Oil prices rose some two per cent while the Dow Jones rose 0.43 per cent, the S&P 500 jumped 0.46 per cent and the Nasdaq climbed 0.34 per cent at Friday closing.

US stocks have largely maintained an overall three-week streak erasing nearly all losses since July and coming up on top for 2015.

China crisis? What crisis?

Global stocks have also been buoyed by expectations that the European Central Bank may soon increase its seven-month stimulus program to offset recent deflationary data across the eurozone.

In Europe, London’s FTSE 100 rose 0.62 per cent mimicking similar positive performance in France’s CAC 40. Germany’s DAX 20 was up 0.4 per cent at Friday close while the pan-European Stoxx Europe 600 jumped 0.6 per cent.

But speculation that China, too, will increase its stimulus to boost its markets played a larger role this week by allaying fears among global investors that the Beijing “correction” has ended.

More to the point, the benchmark Shanghai Composite (SHCOMP) and Hang Seng (HSI) indexes continued two weeks of gains, closing up 1.6 and 0.8 per cent respectively.

The SHCOMP is now up 14.7 per cent from its August 26 massive sell off; the HSI is up 13 per cent from the same period.

Meanwhile, Japan’s Nikkei has seen a revival of sorts as it closed up 1.1 per cent on Friday, largely due to speculation that the central bank will soon begin its own stimulus program.

Japan, one of the world’s biggest exporters of goods, has seen global demand for its wares significantly drop in the past few months as client countries – particularly emerging economies – struggle to deal with devalued currencies and weakening economies.

The Japanese economy contracted 0.3 per cent in the second quarter.

The BRICS Post with inputs from Agencies