10th February 2016
Stock markets in Europe rose on Wednesday (February 10th), rebounding from two-year lows hit during the previous session as financials climbed.
The FTSE 100 was up 1.25 per cent in morning trading, having touched on its lowest level in three years on Tuesday, led by gains for Prudential, Legal & General and Aberdeen Asset Management.
In Germany, the DAX enjoyed an even more impressive rally as the index rose 2.25 per cent, dragged up by a 14 per cent gain for Deutsche Bank as it announced plans for a bond buyback to reassure investors.
The rebound despite another poor session for Asian markets saw the Nikkei 225 shed a further 2.3 per cent to close at 15,713.39. This followed a 5.4 per cent decline in the previous session and the index is now down a quarter from its June 2015 peak.
Australia’s S&P/ASX 200 dropped another one per cent, extending Tuesday’s three per cent fall to see the index enter bear market territory.
Futures trading on Wall Street pointed to a higher open for US stocks on Wednesday, with the S&P 500 futures market up nearly one per cent and Nasdaq futures rising 1.3 per cent.
Oil rallied from Tuesday’s sharp losses, with US light crude rebounding from a near eight per cent fall in the previous session to trade up 2.5 per cent at $28.64. In London, Brent was up 2.6 per cent at $31.12 a barrel.
In the forex markets, the dollar continued to come under pressure ahead of a hotly-anticipated testimony by Federal Reserve chair Janet Yellen.
USD/JPY was holding just below the 115 handle, while EUR/USD was a shade lower around 1.126.
Sterling also rose against the greenback, with the cable up 0.3 per cent at 1.4521, although gains were limited by data showing a sharp decline in UK factory output in December.
Industrial production was down 1.1 per cent in the final month of 2015, its biggest drop since September 2012.
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