Asian stocks closed broadly higher and European stocks surged in morning trade Tuesday as a rebound in oil prices boosted investors’ risk-taking appetite. A barrel of the international oil benchmark Brent crude was trading 1..8 percent higher at $43.71 at 6:37 a.m. EDT, primarily due to the disruption in supply chain caused by the oil workers’ strike in Kuwait, where oil output fell to 1.1 million barrels a day Sunday from 2.8 million barrels a day in March.
“It is quite amazing how oil prices have recovered from Monday's lows. That is shoring up risk appetite and pushing up commodity-linked currencies,” Niels Christensen, foreign exchange strategist at the financial services company Nordea, told Reuters. “As long as oil remains above $43 a barrel we think commodity currencies will remain supported.”
In Europe, where stocks climbed to a three-month high Tuesday, the rally was spearheaded by shares of mining companies. Glencore’s shares climbed 2.3 percent, while BHP Billiton rose 2.6 percent in London.
The broader FTSE 100 Index was up 0.46 percent before noon, while the pan-European Stoxx 600 was 1.3 percent higher at the same time.
Meanwhile, in Germany, data released Monday by the ZEW Center for European Economic Research showed that for economic sentiment in the country rose for the second month in a row. The ZEW think tank said that the closely-watched gauge rose to 11.2 in April — up 6.9 points from March.
“On balance, however, the continued poor growth in China and other important emerging markets continue to be a burden for the German export industry. Furthermore, concern about Great Britain’s possible exit from the EU seems to be having a negative impact,” ZEW researcher Sascha Steffen said in a statement.
During early afternoon trade, Germany’s DAX index was up 2.1 percent.
Overnight, in Asia, stock markets pared the previous day’s losses, led by Japan’s Nikkei 225 index, which surged 3.7 percent Tuesday.
“The concerns we had yesterday were perhaps too extreme and didn’t spread to U.S. markets, which is leading to a sense of relief as oil prices recovered at the bottom,” Toshihiko Matsuno, chief strategist at SMBC Friend Securities in Tokyo, told Bloomberg. “We now have concerns that the economic impact from the Kumamoto earthquake could become larger, which is leading to expectations of further easing from the Bank of Japan.”
Stock markets elsewhere in Asia also reported some gains, with China’s Shanghai Composite Index and the smaller Shenzhen Composite both ending the day up 0.3 percent. India’s S&P BSE Sensex rose 0.7 percent, while South Korea’s Kospi Index ended up 0.1 percent.
Meanwhile, futures of the Dow Jones Industrial Average were up 0.37 percent at 6:27 a.m. EDT, pointing to a bullish start for the U.S. stock index Tuesday. S&P 500 and Nasdaq stock futures were also up 0.5 percent and 0.8 percent respectively at the time.