Global stock market increased on Wednesday which extending a broad rally as fears receded that the Brexit vote last week would disrupt the world economy. The Dow Jones Industrial Average up 1.15% to 17,610.69. The S&P 500 rose 1.27% to 2,062.02, and the Nasdaq Composite increased 1.40% to 4,757.70.
Investors appeared to have set aside their anxiety over Britain’s vote, encouraged by solid data on the American economy and housing market. But analysts said market volatility could return any time and it was too early to say that investor confidence had made a full comeback since the vote for “Brexit,” a British exit from the European Union.
“Stock markets may find it difficult to return immediately to the levels seen before last week’s vote with buyers being wary about being too aggressive in what may yet be just another volatile swing,” said Ric Spooner, chief market analyst at CMC Markets, in a commentary.
European shares rose across the board, with the Stoxx Europe 600 advancing 2.7% in Europe, and London’s FTSE 100 gaining 2.7%. The pound, which had fallen to a 31-year low against the dollar Monday, rose 1.2% to $1.350. The euro edged up 0.2% against the dollar to $1.1095. The yield on the 10-year U.S. Treasury fell to 1.458%, slightly lower than Tuesday’s close of 1.463%, which was the second-lowest yield of the year.
Asian market also rallied on Wednesday, with Japan’s Nikkei Stock Average rising 1.6% and Hong Kong’s Hang Seng Index adding 1.3%. In commodities, U.S. crude oil rose 2.4% to $48.98 a barrel, supported by the weaker dollar and the threat of union strikes in Norway. Gold rose 0.7%, to $1,327.30 a troy ounce.
“People are starting to take stock that this is more country-specific and is not affecting markets everywhere,” said Andrew Sheets, chief cross-asset strategist at Morgan Stanley. “So far, it doesn’t appear to be a big risk to global growth.”