The Nasdaq composite climbed 75 points, or 1.7 percent, to 4,548.
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Energy stocks surged, with BHP Billiton up 7.5 percent and Rio Tinto 3.4 percent higher in Sydney, while Hong Kong-listed CNOOC soared 8.1 percent and PetroChina climbed 7.9 percent. Meanwhile, major commodity linked currencies continued to grab attention as oil rebounded above the $31 per barrel mark; a marked improvement on the previous session but still close to lows last seen in December 2003.
“The Canadian dollar and Norwegian krone are up, helped by firmer oil prices”, Nick Bennenbroek, head of currency strategy at Wells Fargo & Co., in NY, said in a note.
Japan led a rally in Asian stocks Friday, extending a global market rebound fueled by the prospect of more stimulus from the European Central Bank and a bounce in battered oil prices.
Fears that the global economy can no longer rely on China for strong growth, together with plummeting oil prices, caused concern amongst investors and hurt the value of global stocks, although there is a hope that this will encourage spur private consumption. They cut their long-term outlook to 1.8 percent from 1.9 percent.
Shortly after the opening bell, the Dow Jones Industrial Average rose 209.12 points (1.32) percent, to 16,091.80. Short positions in the USA oil futures and options markets had doubled in three months to record highs of more than 200 million barrels.
“I don’t think anyone really believes we’ve seen the bottom”, said Warren West, principal at Greentree Brokerage Services in Philadelphia. While the European Central Bank left key interest rates and its 1.5 trillion euro ($1.6 trillion) monetary stimulus program unchanged Thursday, Draghi underscored his willingness to ramp up the program if plummeting oil prices and market turmoil threaten the continent’s weak economy. “It’s a nice bounce, but it’s still trading in the range of those August lows and you can’t really call it a rally”.
“Markets seldom repeat themselves with precision, but we see potential for a variation on that theme now”, said Tim Evans, energy futures specialist at Citi Futures.
The latest rally is somewhat less impressive on an absolute basis than on a percentage basis.
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The Stoxx Europe 600 Index rose 3 per cent, rallying 5 per cent in two days. “Additionally, the European Central Bank (ECB) also signalled that it may announce another stimulus measure in its next meeting in March”, said Shreyash Devalkar, fund manager, equities, BNP Paribas Mutual Fund. He reiterated his stance in Davos on Friday. The gauge closed at the lowest since May 2009 on Thursday, sending valuations to the cheapest since March 2014.
