Stock markets around the world climbed on Thursday after upbeat U.S. GDP data relieved the negative sentiment that had been pulling shares down earlier this week. European shares also climbed and crude oil staged its biggest one-day rally in the last six years.
Asian markets are rallying for the second consecutive day after one of most turbulent weeks they have seen. As of this writing, MSCI's broadest index of Asia-Pacific shares outside Japan has gained 1.2%. The index suffered a volatile week as it followed Chinese shares into three-year lows. The improved sentiment and positive consumer price data in Japan had lifted the Japanese Nikkei 225 3% higher. Despite the climb, the Nikkei is down 1.5% for the week. China's Shanghai Composite index added 2.5 percent, as it reduced its weekly losses to 10.8%. The Hong Kong Hang Seng index added 0.3 percent, but still remained down 2.2% when examining the entire week.
U.S. shares rose sharply on Thursday for the second consecutive day as the market followed the surprisingly positive U.S. GDP report. The report revealed that the U.S. economy grew at a surprisingly fast rate. U.S. output of goods and services had risen by 3.7% during the second quarter while most expectations pegged growth at around 2.3%. The Dow Jones added 369.26 points, or 2.3%, to trade at 16,654.77 after gaining 619 points on the previous day. The index has added nearly 1,000 points over two days following one of the most dramatic weeks in recent memory. Over the previous six sessions, the index had fallen by 1,879 points, or nearly 11%. The S&P 500 was also aided by soaring oil prices as it added 47.15 points, or 2.43%, to trade at 1987.66. The Nasdaq Composite rose 115.17 points, or 2.45%, to trade at 4,812.71. U.S. Crude oil prices rallied nearly 10% on Thursday. The commodity is currently trading at $42.78 after gaining an additional 0.52% in early Asian trading.
The positive atmosphere also lifted European shares to pare losses caused by concerns over China’s growth. The STOXX 600 added 12.13 points, or 3.5%, to trade at 362.27, bringing the index slightly above its level prior to “Black Monday’s” massive sell-off. The oil sector led the gains as soaring oil prices lifted it. The German DAX 30 gained 318.19 points, or 3.2%, to trade at 10,315.62 as it pared losses from earlier this week. The French CAC 40 rose 3.5% to trade at 4,658.18 and the UK’s FTSE 100 added 3.6% to close the day at 6,192.03.
This week’s economic data releases closes will close with the release of UK GDP data and German inflation data. Monday will see the release of inflation data for the entire Eurozone, followed by Chinese PMI data. PMI, or the Purchasing Managers’ Index, is an indicator of the manufacturing sector, putting it in focus after the financial turmoil set off by Chinese shares.