Wall Street recovers on rate rise hopes
Wall Street’s best session since late July means European markets are set for a positive start, with IG Index predicting that the FTSE 100 index will open 0.7% higher at 6958.
The US performance came after weaker-than-expected figures on manufacturing activity boosted hopes that the Federal Reserve will slow the pace of interest rate rises.
The S&P 500 jumped by 2.6% and the tech-heavy Nasdaq Composite by 2.3%, while US futures are also pointing to further progress later today. The next big test for sentiment is likely to come with Friday’s monthly non-farm payrolls report.
Mark Haefele, chief investment officer at UBS Global Wealth Management, said: “After falling more than 9% in September and extending its year-to-date decline to nearly 25% as of Friday’s close, we think the S&P 500 was looking oversold.
“In addition, some of last week’s selling pressure may have been driven by quarter-end rebalancing, which has now ended.”
Asian markets followed Wall Street’s lead as the Nikkei in Japan lifted by more than 2.5%.
Brent crude, meanwhile, remains just below $90 a barrel after rising 4% yesterday on expectations that Opec will reduce planned output at its meeting tomorrow.
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