Asian stock markets break six-day run of losses
Asian stocks rose after Wall Street soared overnight, breaking a six-day string of losses.
The recovery brought a measure of relief to many investors, although experts warned that more volatility could be ahead.
The Shanghai Composite Index, whose sharp drop on Monday triggered a global sell-off, rose 2.2% to 2,992.99 points, rebounding from several days’ declines. Tokyo’s Nikkei 225 was up 2% at 18,753 and Seoul’s Kospi gained 1.1% to 1,915.70.
The gains came after Wall Street rocketed up overnight. The Dow Jones industrial average soaring more than 600 points, or 4%. That was its third-biggest point gain of all time and its largest since October 28, 2008.
Hong Kong’s Hang Seng advanced 2.3% to 21,573.56 and Sydney’s S&P ASX 200 gained 1.6% to 5,254.00. Benchmarks in Taiwan, Singapore, Bangkok and Jakarta also rose.
Traders were encouraged by comments from William Dudley, president of the New York Federal Reserve Bank, that the case for a US interest rate hike in September is “less compelling to me than it was a few weeks ago,” given China’s troubles, falling oil prices and weakness in emerging markets.
“Traders took the cue to buy,” said Nicholas Teo of CMC Markets in a report.
Following a six-year run-up in US stocks that has pushed major indexes to all-time highs, investors worry the economy could falter if the Fed raises rates too soon.
Panicked selling over the past week was triggered by declines in China, but analysts said it had no basis in economic developments. The Shanghai index has lost more than 40% of its value since soaring to a peak June 12 and then plunged despite a multibillion-dollar government intervention.
Analysts said there are probably more rollercoaster days ahead because of worries about China and a possible Fed rate increase.
