SEOUL, South Korea (AP) — Chinese stocks surged for a second day, leading world markets higher on Thursday, as confidence grew that stimulus measures are helping the world’s No. 2 economy to stabilize. The gains helped offset concerns that the U.S. Federal Reserve appears set to raise interest rates in December.
KEEPING SCORE: Germany’s DAX rose 0.9 percent to 10,945.83 and France’s CAC 40 was up 1.1 percent at 5,000.99. Britain’s FTSE 100 recovered from early losses to trade flat after the Bank of England indicated it was still unclear when it might start raising interest rates.
Futures indicated that stocks on Wall Street would rise on the open. Dow and S&P 500 futures each added 0.4 percent.
FED WATCH: Testifying before a committee of the U.S. Congress, Federal Reserve Chair Janet Yellen described the U.S. economy as “performing well” and an interest rate hike in December as a “live possibility” if the economy stays on track. Her view was echoed by another Fed policymaker later in the day. Yellen did stress that no decision has been made yet and a move in December will depend on how the economy fares between now and then.
ANALYST’S TAKE: “Even with weak data, Fed rhetoric increasingly points toward a December lift-off,” DBS Group Research said in a daily commentary. The report said it was only a week ago when markets lowered the odds of a December rate hike due to poor data. “Markets have had to adjust expectations rapidly.”
CHINA RALLY: Chinese stocks rose as much as 3 percent during the day before closing 1.8 percent higher in a sign that state intervention has quelled investor fears about the stock market after a dramatic wipe-out of gains over the summer. Angus Nicholson, a market analyst at IG in Melbourne, Australia, said stability in China’s economic data, such as retail sales and manufacturing, indicate Beijing’s stimulus policies are starting to have an effect in supporting growth.
ASIA’S DAY: China’s Shanghai Composite Index finished 1.8 percent higher at 3,522.82 while Hong Kong’s Hang Seng closed flat at 23,051.04. Japan’s Nikkei 225 rose 1 percent to 19,116.41. Australia’s S&P/ASX 200 fell 0.9 percent to 5,193.00 and South Korea’s Kospi was down 0.2 percent at 2,049.41. Markets in Southeast Asia were mostly lower.
ENERGY: Benchmark U.S. crude futures rebounded, adding 6 cents to $46.38 per barrel in electronic trading on the New York Mercantile Exchange. The contract slumped $1.58, or 3.3 percent, to close at $46.32 a barrel on Wednesday as Yellen’s comments pushed up the dollar.
CURRENCIES: The euro rose slightly to $1.0876 from $1.0866 on Wednesday. The dollar strengthened to 121.89 yen from 121.51 yen.
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