US stocks have kicked off November on a high note after a sharp rally in China’s markets and with investors gearing up for a key monetary policy announcement from the US Federal Reserve later this week.
Wall Street’s benchmark S&P 500 opened 0.5 per cent higher, while the tech-heavy Nasdaq 100 added 0.6 per cent. The S&P 500 fell during the previous session but notched up gains of nearly 8 per cent for October. Investors are braced for a Fed decision that could help set the trajectory for markets in coming weeks.
Europe’s Stoxx 600 added 1.3 per cent and London’s FTSE 100 gained 1.6 per cent.
The gains followed a sharp rise in shares on mainland China and in Hong Kong. The CSI 300 index of equities in Shanghai and Shenzhen jumped 3.6 per cent, while Hong Kong’s Hang Seng climbed 5.2 per cent higher.
Analysts said the rise, which helped offset some of the losses sustained since the end of the Chinese Communist party’s 20th congress a week ago, was fuelled by unverified rumours circulated online that China’s government had created a task force to consider reopening plans for next year.
Most of the day’s gains came after social media posts made shortly before the close of the Hong Kong morning session suggested, without naming sources, that China had established a “reopening committee” to assess different reopening scenarios for early next year.
Analysts said buying appeared to be motivated by the rumours, but were sceptical of their veracity.
“There are quite a few institutions buying shares today,” said Louis Tse, managing director at Hong Kong-based brokerage Wealthy Securities.
“The numbers are there, and there is heavy turnover, but if China opens it will do so gradually, rather than in one go. They can’t afford to have that many cases all of a sudden.”
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