The Shanghai Composite Index, whose steep drop in recent days triggered worldwide selling, gained 5.3 per cent to close at 3,083.59 points, bouncing back from losses that wiped some 20 per cent off its value over the past week.
US stock markets jumped in early trading today despite continuing losses in Asia and ongoing concerns about the Chinese economy.
The Dow Jones industrial average rose 619.07 points, or 4 percent, to 16,285.
Closer home, traders expect shares to continue to remain volatile even after a strong start, especially as the market closes out the monthly derivatives contracts. Investors interpreted the move as an attempt to bolster a sagging economy.
The euro held steady against the dollar, a day after New York Fed President William Dudley told a press briefing that a September rate hike is looking less compelling than a few weeks ago amid the recent market turmoil. However, he also stated that the situation could still change before the Fed’s next policy meeting scheduled for mid-September.
“There’s a lot of cash on the sidelines waiting to get in, so to the extent that there’s any sort of bottom seen, that will increase people’s confidence and boldness”, said Erik Davidson, chief investment officer for Wells Fargo Private Bank.
ECONOMIC BELLWETHER: The Commerce Department said orders for durable goods, or items expected to last at least three years, rose 2 percent last month after a 4.1 percent gain in June.
Ironically, U.S. stocks rallied on Wednesday on expectations that the Fed will hold off from hiking interest rates next month due to mounting global uncertainties, including China – the very factors that prompted heavy selling in the previous sessions. The Standard & Poor’s 500 index gained 22 points, or 1.2 percent, to 1,890.
NEVER MIND: Monsanto shares climbed 8.6 percent on news that the agricultural products maker has made a decision to abandon its takeover bid for rival Syngenta. Energy stocks turned in a mixed performance, with Woodside Petroleum rising 1.7 percent and Santos climbing 2.1 percent on firmer oil prices, while Oil Search tumbled 3.2 percent. Shipping lines Kawasaki Kisen and Nippon Yusen both fell over 1 percent. Japan’s Nikkei 225 stock index rose 3.2 percent.
Benchmark U.S. crude gained 92 cents to $39.53 per barrel in electronic trading on the New York Mercantile Exchange.
The FTSE 100 fell by more than 1.5% on Wednesday 26 August and Germany’s DAX opened 160 points lower, a decline of -1.68%, after recovering on Tuesday.
Seoul shares rose for a third straight day on hopes for delayed U.S. rate hike. Market heavyweight Samsung Electronics closed on a flat note, while automaker Hyundai Motor and steelmaker POSCO lost about 2 percent each.
In currency markets, the dollar rose to 120.2220 yen from Wednesday’s 120.1440 yen.
The euro was up about 0.1 percent at $1.1327 after losing 1.7 percent overnight, knocked further away from a seven-month peak of $1.1715 scaled on Monday.