Global equity markets rose, lifted by a surge in the United States market, as investors took in stride a potential limited American military strike against Syria.
Reuters reported that data from around the globe suggested an improving world economy.
The best monthly US auto sales figures in almost six years, US trade data that suggested a growing economy this quarter and data from Europe and China fueled the optimism.
The dollar hovered near a six-week peak against a basket of currencies as encouraging US manufacturing data on Tuesday reinforced expectations that the Federal Reserve would cut back its economic stimulus later this month.
Markets showed little reaction to a Fed report that the economy expanded at a “modest to moderate” pace in most of the country between early July and late August. The Beige Book report was just strong enough to reinforce the prospect of a pullback in monetary stimulus.
Brent crude drifted lower and gold prices fell below $1,400 an ounce.
A gain of almost one per cent on Wall Street led share prices in Europe to rebound. MSCI’s measure of global equity markets rose by 0.6 per cent and the pan-European Eurofirst 300 index of leading shares closed 0.2 per cent higher.
“People hope there will just be a tactical strike and that’s it,” the managing director at Southwest Securities in Fort Lauderdale, Florida, Mr. Mark Grant, said. “But there are worries about retaliation and a wider conflict isn’t priced into the market.”
A second day of stock gains retraced most of last week’s Syria-related losses on Wall Street, pushed by auto sales.
The Dow Jones industrial average was up by 95.72 points, or 0.65 per cent, at 14,929.68. The Standard & Poor’s 500 Index gained 12.81 points, or 0.78 per cent, at 1,652.58. The Nasdaq Composite Index rose by 33.99 points, or 0.94 per cent, at 3,646.60.
Auto sales pointed to the industry’s strongest month since just before the start of the 2007-2009 recession. US auto sales were on a pace to post a gain as high as 17 per cent in August.