PARIS — Stocks rose Thursday in Europe and Asia, following Wall Street’s lead and a deep cut in Chinese interest rates.
Indian stock markets were closed after a terrorist attack Wednesday in Mumbai left more than 100 people dead, and it was not immediately known when trading would resume.
In morning trading, the Dow Jones Euro Stoxx 50 index, a barometer of euro zone blue chips, rose 2.4 percent, while the FTSE 100 index in London gained 2.1 percent. The CAC 40 in Paris was up 2.6 percent, and the DAX in Frankfurt rose 2.5 percent.
“There is fresh risk-taking, but not enough to sustain a rally,” Adrian Pankiw, a strategist at Henderson Global Investors in London, said. “Everyone’s just waiting to close the books and getting ready for next year.”
“They’re doing everything they can to avoid deflation,” he said, referring to the trillions of dollars in financial bailouts and economic stimulus measures governments have announced in the last few months. “We’ve seen from the case of Japan that the cost of deflation is much higher than the cost of the measures they’re taking now. Japan is still paying for it.”
UBS rose 4.1 percent. Peter Kurer, the UBS chairman, told shareholders Thursday that 2009 would be a profitable year for the Swiss bank.
Trading in Woolworths was suspended in London. The 99-year-old British retailer appointed administrators to seek a buyer for its more than 900 stores. October data from the United States underlined the dismal economic picture. Consumer spending dropped a full percentage point, the biggest decline since 2001, while durable goods orders fell 6.2 percent, and sales of new homes declined 5.3 percent.
U.S. markets were closed Thursday for the Thanksgiving Day holiday, but futures traded on the Standard & Poor’s 500 index fell about 0.2 percent. On Wednesday, the index rose 3.5 percent in New York. Despite the rally, bond yields plunged to record lows, as prices were lifted by the Federal Reserve’s plan to buy mortgage securities.
The benchmark U.S. 10-year note closed Wednesday trading at a yield of 2.978 percent. Mr. Pankiw noted that, with the exception of Germany, most European government bonds were also trading near record lows. Part of the story, he said, is that after years of consumer “dissaving,” savings rates are beginning to rise, even as net pay falls.
The Chinese central bank’s move Wednesday to cut its main interest rate by 1.08 percentage point gave Asian stock markets a lift, with the Shanghai Stock Exchange composite index gaining 1.1 percent. Malcolm Wood, Head of Asia Pacific Strategy at Morgan Stanley in Hong Kong, said the move was an “extraordinarily aggressive policy action in the face of extraordinarily bad news,” but that this — and a flurry of measures around the world in the past two months — was grounds for optimism in the global effort to shore up the real economy.
The Tokyo benchmark Nikkei 225 stock average gained nearly 2 percent, while the Hang Seng index in Hong Kong rose 1.4 percent. The S&P/ASX 200 index in Sydney rose 1.4 percent.
U.S. crude oil futures for January delivery fell $1.68 to $52.76 a barrel in electronic trading on the New York Mercantile Exchange.
