Skip to: Content
Skip to: Site Navigation
Skip to: Search


Stocks rise worldwide

Stocks up in Asia, Europe after Fed chairman's speech. Futures point to higher open for US stocks.

By Patrick GrahamReuters / August 29, 2011

Traders work at their desks in front of the DAX index board at Frankfurt's stock exchange Aug. 29, 2011. European and Asian stocks climbed higher, tracking Wall Street's response to Fed Chairman Ben Bernanke's speech last week.

Kirill Iordansky/Remote/Reuters

Enlarge

LONDON

Global stocks jumped almost one percent on Monday while the dollar struggled after Federal Reserve Chairman Ben Bernanke left the door open for further action to stimulate the U.S. economy and fight unemployment.

Skip to next paragraph

World shares rose 0.98 percent, with European and Asian markets tracking Friday's 1 percent rise on Wall Street following Bernanke's keynote speech in Jackson Hole.

As the same venue, IMF chief Christine Lagarde added to pressure for policymakers to do more to prop up a flagging global economy, telling officials they must "act now", including forcing European banks to bulk up their capital.

U.S. stock futures predicted a 1 percent rise when the market opens after Hurricane Irene, downgraded to a tropical storm on Sunday, caused less damage than feared in the nation's financial centre.

With London markets closed for a holiday, European stocks rose 0.8 percent, with banks shrugging off Lagarde's comments on the sector to trade up 1.1 percent.

Bernanke gave no details on Friday of further action to boost the U.S. recovery but said the central bank's policy panel would meet for two days next month instead of one to discuss additional monetary stimulus, offering some hope to investors of a move then. .

Analysts said a bad run of data before the Fed's meeting may prove crucial.

"The change to a two-day meeting to 'allow a fuller discussion' is something that will likely keep market expectations elevated about the possibility of further monetary policy stimulus," Barclays Capital economist Michael Gapen said in a note to clients.

BARRIERS

Both the dollar and euro gained around 1 percent against the Swiss franc, in which investors are now facing negative rates of return following Swiss National Bank moves to flood the market with liquidity.

But the possibility of more monetary stimulus in the U.S. kept the dollar under pressure on a broader front, down 0.2 percent against a trade-weighted basket of currencies.