Helped by positive news coming from the banking sector, global equity markets saw strong gains over the last few sessions.
News that each of the 19 banks passed their stress test issued by the U.S. government has helped the overnight markets advanced on Thursday. However, the news that Wells Fargo posted a record first quarter profit, beating most analysts forecasts, turned the gains into a real rally. The XLF index rose 15%, while the S&P 500 Banking Index rose 25%, the most on record.
“The news items coming from the U.S. financial sector helped the Asian equity markets advance for a second day, reaching a 3-month high. Additionally, a number of analysts are starting to turn bullish on the global economy, which will probably help the current rally overcome negative reports. “ TheLFB-Forex.com Trade Team notes.
On the Japanese Nikkei 225, at least 25 companies grew more than 5%. The gains were led by Pioneer, which advanced over 22%. The electronic manufacturer will form a strategic alliance with Sharp to increase their market share. Isuzu rose 13% tonight after Goldman said that the company’s shares are “outweighed”. This, in turn helped the whole car-manufacturing industry post significant gains tonight. Additionally, the declines were led by the Japanese financials tonight, as it seems the “zombie banks” are coming back to life in Japan.
Overnight, the Nikkei rose 107.30 points (1.20%) to 9,023.36. The Australian S&P/Asx was close tonight for business.
Crude oil advanced $2.80 to $52.20 as some analysts are saying that the economy has hit the bottom.
Gold traded without a clear direction over the last few sessions. Bullion for immediate delivery fell $2.30 to $881.00