December 11, 2017
Friday, February 12, 2016

Global shares gain as global economy fears ease; oil rallies

US and European shares rebounded from recent weakness on Friday, with reassuring US retail sales data boosting sentiment, while US crude prices rallied from more than 12-year lows.

Banking shares in the United States and Europe spiked, with the S&P financial index last up 3.4 percent and the STOXX 600 Europe Banks index gaining 5.6 percent.

The US S&P 500 gained over 1 percent after five days of losses that had dropped it to its lowest level in two years on Thursday. In Europe, advances in shares of Deutsche Bank and its rival Commerzbank of 11.8 percent and 18 percent, respectively, helped European stocks rebound.

The FTSEurofirst 300 index of top European shares notched its biggest daily gain in five and a half months after hitting a two-and-a-half-year low on Thursday. The index was up 3.04 percent at 1,232.09.

The S&P financial index has fallen about 15 percent this year, and the European bank index nearly 25 percent, as worries over the impact of central banks' negative interest rate policies on banks' profitability intensified in recent days.

Commerce Department data showing US retail sales excluding automobiles, gasoline, building materials and food services increased 0.6 percent in January also boosted optimism.

Japan's Nikkei share average stumbled to a fresh 16-month low in heavy trade and posted the biggest weekly drop since 2008 as investors scrambled to dump risky assets after the dollar dived to a 15-month low against the yen.

The Nikkei sank 4.8 percent to 14,952.61, the lowest closing level since October, 2014.

For the week, the Nikkei dived 11.1 percent, the biggest weekly drop since October, 2008.

Topix's volume was outstanding, with 4.704 billion shares changing hands, the largest since last August.

Japanese markets were closed for a public holiday on Thursday, when the dollar fell as low as 110.985 yen, its lowest level since October 2014 as fears of a global economic slowdown and concerns about stress in the banking system increased demand for safe haven assets.

Japanese stocks' steep drop followed the Bank Of Japan's decision to adopt negative interest rates late last month, but the yen has gained as investors dumped riskier assets and look for safe havens amid the market turmoil.

Federal Reserve Chair Janet Yellen did little to help the dollar in her second day of testimony before US lawmakers. While she said she still expects the Fed to gradually hike interest rates this year, she reiterated that policymakers were not on a "pre-set" path to return policy to "normal" given a worsening meltdown in global stock markets.

The broader Topix dropped 5.4 percent to 1,196.28 and the JPX-Nikkei Index 400 fell 5.6 percent to 10,780.40.

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Tags:  US  stock market  Europe  Nikkei  

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