Trading was more volatile on China’s smaller Shenzhen Composite, which opened higher, but then shed as much as 3% before mounting a recovery.
Markets rebounded yesterday with world stocks, oil prices and bond yields all rising after China cut interest rates and banks’ reserve requirements in a bid to kick-start its wavering economy.
The move follows dramatic stock declines suffered earlier in the week. Japan’s Nikkei 225 stock index rose 3.2% to 18,376.83, South Korea’s Kospi gained 2.6% to 1,894.09 and Australia’s S&P ASX/200 rose 0.7% to 5,172.80, helped by buying of resource-related shares.
Investors also welcomed encouraging government data indicating that U.S. consumer confidence rebounded this month.
A sharp sell-off in the final hour of trading Tuesday drove the Dow down by more than 200 points.
The broad-based S&P 500 gained 38.58 (2.04 per cent) to 1,931.79, while the tech-rich Nasdaq Composite Index jumped 108.71 (2.40 per cent) to 4,634.95.
A Chinese investor monitors stock prices on a computer terminal at a brokerage house in Beijing.
“They are trying to figure out what the slowdown in China means to the global economy”, he said.
In a VOA interview, Lardy said investors watch China with great care in the hope of getting “forward indicators” of the direction and strength of an economy that affects demand for so many products in so many nations. The Dow has fallen about 1,900 points over that period, while the slump wiped more than $2 trillion off the value of S&P 500 companies.
Traders are also waiting for clarity from the Federal Reserve, which has signaled it could begin raising its key interest rate from near zero for the first time in almost a decade later this year.
Markets around the world offered a mixed picture of whether the steep drops of recent days had been halted.
Their policy won’t be announced until after a meeting in mid-September.
Trader Christopher Lotito works on the floor of the New York Stock Exchange, Tuesday, August 25, 2015. The blue-chip Euro STOXX 50 index rose 4.7 percent.
Brent crude futures were last down 0.4 percent at $43.04 per barrel, while U.S. crude was down 0.7 percent at $39.05.
The FTSE 100 in London tumbled 1.5 percent after the opening bell, while Germany’s DAX lost 1.3 percent, and continues to flirt with bear market territory.