U.S. Shares Surge, Asian Markets Trail Close

Asian trade: Shares in Asian session advanced, after the U.S. equity markets managed to post a dramatic turn around, swinging more than 800 points near the end of the session.

Equity markets in the U.S. managed to post a very strong rally, after they bounced from the bottom set in October. The Dow Jones swung 800 points, while the broader S&P rallied 90 points, despite the very weak data that hit the market’s valuation. However, the U.S. future market is now running in the red, having the Dow fall by 81.00 points and the S&P down by 8.70 points.

Yesterday, a report showed that the unemployment claims jumped the most since 2001, while the numbers of workers claiming for unemployment benefits rose to the biggest number since 1983. Together with other releases that we have seen lately, it paints pretty much a gloomy picture for the next few quarters. Almost every region is heading towards a recession, and we have not even seen the middle of the credit crunch as of yet, it seems.

Asian shares rose for the first time in the last four days. The biggest gains were seen in the commodity stocks, lifted by the mini-rally in the last session of trading and triggered by the dollar’s sell-off. Tonight, the Nikkei gained 315.15 points (4.26%) to 8,589.79. In Australia, the S&P/Asx rose 77.50 points (2.10%) to 3,774.90, bouncing off a 4-years low.

Crude oil is trading mixed, shedding some of the losses seen lately. Crude oil for December delivery gained $0.16 (0.27%) to $58.40.

Gold posted strong gains as a reaction to the dollar’s sell-off. Bullion for immediate delivery surged $23.50 (3.33%) to $728.50.

Previous Wall Street trade: Equity markets hit the credit crisis low made on Oct. 10 but staged a dramatic rally to finish the day with a huge turnaround. The DOW had fallen as much as 328 points by that point after reports on unemployment and trade showed the economy was continuing to weaken.

"A base has been established, at least for now," said Matthew Carniol, chief currency strategist at TheLFB-forex.com. "The S&P made what chart technicians call a "triple bottom" and it now may make a test of the resistance in the 1000 to 1020 area. Perhaps it will be a relatively cheerful Christmas after all."

Previous European trade: The only thing that is keeping the equity markets within reaching distance of the break-even line in Europe are speculations that the central banks will intervene again, and cut the key interest rate. Almost all central banks are expected to cut in the upcoming meetings, in order to support the fading economies. However, the high rates seen in commercial papers, especially on debt issues by private corporations show that banks are in no hurry to pass the liquidity onto the market. Even though the LIBOR rates keep falling lower and lower, the spread, compared with the overnight rates, are still huge proving the market is still in a high alert phase