NEW YORK: Global equity markets surged and the dollar fell from two-month highs Monday as investors moved into the shares of beaten-down sectors such as banks and travel stocks on the heels of a sharp stock market sell-off the week before.
Asian shares gained, with Chinese shares boosted by data over the weekend showing China’s industrial firms grew for the fourth consecutive month in August.
“We’re seeing a bit of a relief rally,” said Jonathan Bell, chief investment officer at Stanhope Capital. “Things got oversold perhaps a little bit in the short term.”
“We saw quite a lot of exuberance in July and August, with prices, particularly of tech stocks, rising and that then has come off a little bit recently,” he said.
MSCI’s gauge of stocks across the globe gained 1.79 percent following broad gains in Asia and Europe.
The STOXX 600’s banking stock index was up 4.4 percent, after hitting a fresh all-time low on Friday. In midmorning trading on Wall Street, the Dow Jones Industrial Average rose 488.98 points, or 1.8 percent, to 27,662.94; the S&P 500 gained 54.73 points, or 1.66 percent, to 3,353.19; and the Nasdaq Composite added 162.86 points, or 1.49 percent, to 11,076.42.
Hotels, banks, and airline stocks all gained more than the broad market, with shares of Delta Air Lines Inc. up nearly 4 percent and Bank of America Corp. up nearly 2.5 percent.
The dollar index fell, erasing some of last week’s gains, down 0.4 percent on the day at 94.157.
Investors remain broadly cautious in light of rising new COVID-19 infections in Europe, which pose the risk of further restrictions on activity.
Benchmark 10-year notes last fell 1/32 in price to yield 0.661 percent, from 0.659 percent late on Friday.
“You’re seeing a nice bounce for stocks, but it’s more of an oversold bounce, and the bond market is still apprehensive about totally buying in on this equity move,” given the uncertainty over additional fiscal stimulus in the United States and the Nov. 3 presidential election, said Ryan Detrick, chief market strategist at LPL Financial.
US crude recently rose 0.62 percent to $40.50 per barrel and Brent was at $42.14, up 0.52 percent on the day.