Global shares rise after days of volatility

Stocks across the globe rose on Tuesday, with investors encouraged by signs that the Omicron coronavirus variant may be less severe than feared as well as signals from Chinese authorities that they are ready to go. ready to stimulate the country’s slowing economy.

The FTSE All World share index rose 2.2%, on track for its best intraday pace since November 2020, with the S&P 500 up 2.1%, putting the US benchmark within 0.5%. with the record closing price it reached before the new variant was first reported last month.

There has been widespread gain, with over 450 components of the index colored green. The tech-heavy Nasdaq Composite added 3.2%, putting it on track for its biggest one-day gain since March, while the small-cap-focused Russell 2000 index gained 3%. .

share the market has whipsOver the past two weeks, due to concerns about Omicron and expectations that the US central bank may tighten monetary policy faster than previously anticipated.

Scientists are still researching severity of Omicron and the ability to evade vaccines, but some original data from South Africa have suggested that this strain may cause less severe illness than previous episodes of infection.

FTSE All World Index column chart, daily change (%) showing Best Days for global stocks in over a year

Fahad Kamal, Chief Investment Officer at Kleinwort Hambros, said: “What can you say, it’s been a great day, everything is fine. He added that suggestions Omicron could cause less severe illness mean “a lot of cash sitting on the sidelines took advantage of that drop – as it did all year”.

Emiel van den Heiligenberg, head of asset allocation at Legal & General Investment Management, warned that exposure restrictions may still be needed, but noted the impact of previous account lockouts. for stock market earnings is “relatively short-term”.

“Our bet is that equity investors will take a look at it,” he said.

US markets rallied following a strong day in Europe and Asia. The Europe-wide Stoxx 600 index closed up 2.4%, with technology shares and cyclical businesses rising. London’s FTSE 100 rose 1.5%.

Meanwhile, in Asia, investors were also encouraged by Monday’s news that central bank would free up liquidity for the banking system by cutting the proportion of deposits that financial institutions must hold in reserve. The Government’s top decision-making body is also committed to maintaining a proactive fiscal policy and a “flexible” monetary policy.

Wei He, China analyst at Gavekal Dragonomics, writes: “In both actions and words, China’s policymakers are becoming more willing to ease policy to counter the downturn. sharp decline in growth”.

Hong Kong’s Hang Seng stock index rose 2.7%, while Tokyo’s Topix closed 2.2% higher.

The increased optimism was also reflected in rising oil prices and falling government bond prices.

Brent crude, the global oil benchmark, rose 3.7% to $75.79 a barrel.

In the government debt market, the yield on 10-year US Treasuries rose 0.03 percentage points to 1.47 percent. Higher yields reflect lower prices.

Additional reporting by George Steer in London

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