Stocks Soar, Dollar Sinks As Investors Digest Fed, Evergrande

NEW YORK / LONDON, Sept. 23 (Reuters) – Global stock markets rallied on Thursday and the US dollar retreated from one-month highs as concerns faded over the Evergrande contagion in China and that investors digested the Federal Reserve’s plans to curb the US stimulus.

The main Wall Street indices all finished at least 1% following solid advances in European markets.

MSCI’s global stock gauge (.MIWD00000PUS) jumped 1.01%, its largest percentage gain in a month and for a third straight session of gains that brought it back since Monday, when it posted its largest percentage decline in two months. after fears linked to the indebted real estate group Evergrande.

It was about “relaxing from the fear of what happened in China.” The markets got oversold and pessimistic very quickly, and then you basically saw a downward buying mentality, ”said Keith Lerner, Co-Director of Investments at Truist Advisory Services.

Evergrande stock (3333.HK) jumped 18% ahead of a key debt payment deadline. read more Gold prices fell as safe-haven trading faded.

Investors were still pondering the implications of the Fed’s policy statement on Wednesday that it should start cutting monthly bond purchases as early as November and reported interest rate hikes could follow sooner than expected. Read more

“In a way, the Fed had prepared investors for what they were going to cut back and somehow getting this news out even though some people saw it as more hawkish is like a sigh of relief, ”Lerner said.

On Wall Street, the Dow Jones Industrial Average (.DJI) gained 506.5 points, or 1.48%, to 34,764.82, the S&P 500 (.SPX) gained 53.34 points, or 1.21 %, to 4,448.98 and the Nasdaq Composite (.IXIC) added 155.40 points, or 1.04%, to 15,052.24. Read more

The pan-European STOXX 600 index (.STOXX) rose 0.93%.

Norway’s central bank has raised its benchmark interest rate and said it plans to raise it again in December, joining a growing list of countries moving away from emergency borrowing costs. The Norwegian krone strengthened against the euro to its highest level since mid-June. Read more

In other currency trading, the dollar index fell 0.428% after hitting a one-month high and the euro rose 0.45% to $ 1.1739. The Japanese yen weakened 0.46% to 110.31 per dollar. Read more

The British pound last traded at $ 1.3722, up 0.71%, after the Bank of England said two policymakers voted to end government bond purchases early and that the markets advanced expectations of an interest rate hike to March.

US 10-year benchmarks last fell 30/32, pushing the yield to 1.4336%, its highest since early July, from 1.331% on Wednesday night. Major eurozone bond yields also climbed after hawkish signals from central banks.

Oil prices rose, supported by growing demand for fuel and a drop in US crude inventories, as production remained hampered in the Gulf of Mexico after two hurricanes. Read more

US crude was up 1.5% to $ 73.30 a barrel and Brent at $ 77.25, up 1.4% on the day.

Spot gold fell 1.3% to $ 1,745.29 an ounce.

Additional reporting by Sujata Rao in London and Alun John in Hong Kong; Editing by Hugh Lawson, Alex Richardson, Steve Orlofsky, Catherine Evans and David Gregorio

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