World stocks rise on Wednesday as investor concerns over US-China tensions decreased after the trip of the president of the House of Representatives, Nancy Pelosito Taiwan.
European markets closed higherwith Paris Y Frankfurt going up around the One percent and the FTSE100 of London climbing a 0.5 percent.
indices Wall Street also rose in midday trading after positive economic data and another round of corporate earnings that included good results from Starbucks and CVS Health.
industry average dow jones rose more than 300 points to a 1.2 percent. The S&P 500 broad-based also earned a 1.4 percentwhile the composite index nasdaq rich in technology jumped a 2.3 percent.
The index ISM of non-manufacturing purchasing managers showed that services activity growth accelerated in July for the first time in four months.
In the meantime, Oil prices fell after the OPEC+ oil cartel, led by Saudi Arabia and Russia, agreed to a small increase in production and official data showed that US crude stockpiles rose surprisingly last week.
OPEC+’s decision to increase the production at 100,000 barrels per day for September disappoints US President Joe Bidenwho traveled to Saudi Arabia last month to ask for help in reining in soaring energy prices, analysts said.
Analyst Edward Gardner, of Capital Economics, however, warned that “As has become increasingly apparent recently, an increase in quotas is not the same as an increase in production.”
Production is supposed to have returned to pre-covid pandemic levelsbut only on paper, as some members of the 23-nation group have struggled to meet their quotas.
Major contracts down more than two percentwith the Brentthe international benchmark, falling by under 100 dollars.
“Roller coaster ride”
The Investors also nervously watched reactions to Pelosi’s visit to Taiwan.which China considers part of its territory.
“What China did not do has apparently been the focal point”said Patrick O’Hare, in Briefing.com.
“China did not take any action that necessitated a US military response. That understanding has brought relief to investors as Speaker Pelosi turns to South Korea.”said.
The most high-profile trip to Taiwan in 25 years by an American politician was greeted with condemnation of Beijing, which promised a “punishment”.
“This week was already shaping up to be another roller coaster ride and Pelosi’s ride just added another layer of event risk for the markets.”said Craig Erlam, an analyst at OANDA.
The news of the visit had caused chills on Tuesday in the parks that were already nervous about the war in Ukrainerising inflation, rising interest rates, and slowing economic growth.
Nevertheless, most stock markets rose on Wednesday.
“There has been a lot of fear, but no material effect”said to the AFP Naeem Aslam, an analyst at AvaTrade, when asked about the impact of Pelosi’s visit on markets.
Investors are also watching the central bank measures to control inflation.
It is expected that the Bank of England follows other major central banks with aggressive interest rate hike to deal with rising inflation on Thursday.
The half percentage point increase would be the largest in more than a quarter century.
(With information from AFP)