KN: World stocks rally as oil price rebound gathers pace
Asian and European stocks rallied Wednesday as a rebound in crude oil prices gathered strength, encouraging investor optimism about broader financial markets.
KEEPING SCORE: European stocks jumped in early trading, with France's CAC 40 up 1.2 percent to 4,621.48 and Germany's DAX rising 1.1 percent to 10,605.31. Britain's FTSE 100 added 1.1 percent to 6,147.81. U.S. stocks were poised to open higher, with Dow futures gaining 0.2 percent to 17,386.00 while broader S&P 500 futures edged up 0.1 percent to 2,037.30.
ENERGY: Oil prices are staging a recovery that's helping lift energy and material stocks. U.S. crude futures rose 38 cents, or 1.1 percent, to $36.52 in electronic trading on the New York Mercantile Exchange. The contract closed up 33 cents to $36.14 a barrel Tuesday. Brent crude, which is used to price international oils, added 44 cents, or 1.2 percent, to $36.55 a barrel in London. Prices for both contracts had fallen by more than a third over the past year, but gains over the past day have provided hope to investors that the sector has hit bottom and is now stabilizing.
QUOTABLE: Steadier oil prices are making investors feel more bullish about energy companies and stock markets overall, said Jackson Wong, associate director at Huarong International Securities. "The selling pressure for these assets is lowered. And also a lot of people that sold these assets (earlier in the year) are buying toward the end of the year because of the low prices," Wong said.
HOLIDAY CALM: Overall, most financial markets are expected to trade in a narrow range until the New Year as traders take time off and the flow of major economic releases slows dramatically over the holiday period. Wong said many of his clients were "already on their way to a long holiday." He added that some fund managers are still buying in order to spruce up their portfolio with good quality stocks before the end of the year, but "I don't see that they're buying aggressively, that's why the volume is low."
ASIAN SCORECARD: Most regional benchmarks ended higher. Hong Kong's benchmark Hang Seng index climbed 1 percent to close at 22,040.59 while South Korea's Kospi gained 0.3 percent to 1,999.22. The Shanghai Composite Index in mainland China lost 0.4 percent to 3,636.09 and Australia's S&P/ASX 200 rose 0.5 percent to 5,141.80. Japanese markets were closed for a holiday.
CURRENCIES: The dollar slipped to 120.96 yen from 121.01 in the previous day's trading. The euro edged lower to $1.0936 from $1.0951.
