LONDON – European stock markets recovered a large chunk of their recent losses Tuesday while oil prices bounced back from multi-year lows, in further volatile trading ahead of an expected interest rate hike from the U.S. Federal Reserve.
KEEPING SCORE: In Europe, Germany’s DAX was up 2.3 per cent at 10,370 while the CAC-40 in France rose 2.2 per cent to 4,572. The FTSE 100 index of leading British shares was 1.8 per cent higher at 5,976. Wall Street was poised for a solid opening with Dow futures and the broader S&P 500 futures up 0.8 per cent.
FED FOCUS: The main focus in financial markets is firmly on the Fed ahead of its expected rate hike on Wednesday, which would be its first for 9 1/2 years. The Fed’s key short-term interest rate has been near zero since late 2008 and that cheap money has helped shore up global stock markets for much of the time since. A rate hike would signal confidence in the U.S. economy, but some investors worry it may slow growth.
ANALYST TAKE: “Given the heavy losses of the first weeks of December a bounce was always likely,” said Chris Beauchamp, senior market analyst at IG.
OIL UP TOO: Oil prices also rose strongly after falling to their lowest levels in over 6 years. A barrel of benchmark New York crude was up 0.7 per cent at $36.47 while the international Brent standard rose 1.4 per cent to $38.70.
ASIA’S DAY: The mood wasn’t as cheery in Asia earlier, where Japan’s Nikkei 225 stock index ended the day 1.7 per cent lower at 18,565.90. Australia’s S&P/ASX 200 fell 0.4 per cent to 4,909.60 and Hong Kong’s Hang Seng lost 0.2 per cent to 21,274.37. The Shanghai Composite fell 0.3 per cent to 3,510.35.
CURRENCIES: Foreign exchange markets were relatively quiet with the euro flat at $1.10 while the dollar was steady at 121.08 yen.