After Getting Dragged Down by Chinese Market, U.S. Stocks Bounce Back
By Staff Writer
Jan 29, 2016 02:54 AM EST
Jan 29, 2016 02:54 AM EST
After pressure from Chinese market which dragged down U.S. stocks for two days, the market bounced back strong on Thursday. Chinese market also started to regain and global stocks market as well. In the meantime, oil price also began to stabilize.
China's market plunged to two-year low since 2014 starting Tuesday January 26. A sudden drop struck fear in the global market over worry of China's economy. While oil price also fell to below $30 per barrel last week as oversupply continued and oil price plunged to the 12-year low.
Starting Thursday, global market started to bounce after dropping for two days. According to Market Watch the Shanghai Composite Index rose 2% after the central bank injected additional 100 billion yuan ($15.21 billion) into the financial system via an extra money-market operation. However, the previous losses gave this January one of the worst month in 7 years, to a 23% down compared to 25% in October 2008.
Bloomberg reported that U.S. stocks started to climb on Thursday. S&P 500 closed higher 0.6% after fluctuating earlier during what was the busiest day of the earnings season. Among the 10 major stocks group, only healthcare stocks declined following Abbott Laboratories and Celgene Corp. announcement of poor sales performance.
In Europe, Stoxx Europe 600 index was down 1.6% after Roche Holding AG and Hennes & Mauritz AB reported their low earning. Poor of banking sectors augmented the fell of European index, as Deutsche Bank AG reported its first full-year loss since 2008.
In Asia, most index futures gains after slides on Thursday where Australia, South Korea and Hong Kong climbed. While Japanese stocks fell after Bank of Japan surprisingly introduces a negative interest-rate policy, by cutting deposit rate to minus 0.1%.
U.S. market started to stabilize after a shocking two days and global stock also followed through. Steady gain in U.S. market followed the Fed announcement on Wedneday to keep interest rate at its current level.
Chief economic strategist at LPL Financial Corp., John Canally said, "I think the Fed statement yesterday got everybody used to the fact that the Fed is probably in pause mode." Regarding influence of oil price, he said in Boston. "Oil is going to dictate where markets go, but there's still a lingering fear that there's some great unknown out there with regard to China."
Meanwhile oil price begin to steady at around $30 a barrel. According to Reuters, Brent was up nearly 1%, after Russian officials decided to talk to Saudi Arabia and other OPEC countries about cutting production to help prices. Brent continue to stabilize at $33.89, while West Texas Intermediate capped for a three-day advance, climbing 2.9% to $33.22 a barrel.
After a two-day pressure from China's stock market, U.S. market bounced back on Thursday followed by global market. Meanwhile oil price began to stabilize to around $30 a barrel.
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