Market Update & Important Indicators:
In the U.S., stocks were little changed in what traders said was a quiet session after the Bank of England surprised investors with an aggressive package of stimulus measures designed to revive the U.K. economy. Insurance companies lagged behind, following a string of disappointing earnings. The rate cut, which was widely expected, was the first since 2009 and brought rates to their lowest level in three centuries. The bank also caught many investors off guard by signalling they expect to cut rates closer to zero later this year and announcing additional easing measures, including an expansion of government bond purchases, launching a new program of corporate bond buying. U.S. stocks have been little changed in light trade for several sessions ahead of Friday's jobs report, as investors refocus their attention on the U.S. economy.
European stocks booked a solid gain as the Bank of England embarked on an aggressive stimulus plan that includes its first rate cut in seven years and a revival of a bond-buying program. The Stoxx Europe 600 rose 0.7% to close at 337.84 as all sectors rose, led by the financial and oil and gas groups. The pan-European index extended its reach after the Bank of England, spurred by Gov. Mark Carney, cut the benchmark rate by 25 basis points to a record low 0.25% and expanded its quantitative-easing program to 435 billion ($579 billion) from 375 billion.
Shares in Asia were mostly higher Thursday on an overnight rebound in oil prices, while Japan's Nikkei pinballed between gains and losses amid uncertainties over monetary easing. Oil price weakness had weighed on regional stocks in recent days, but prices made their biggest gains in three weeks due to demand for gasoline inventories and a bear-market rebound. Data showed that the decline in U.S. gasoline stockpiles was 10 times bigger than expected, traders and brokers said. Overall gains for the rest of the region were muted, with the Korean Kospi closing up 0.3%, and Hong Kong's Hang Seng Index adding 0.4%. The Nikkei Stock Average showed a loss of 1%, before recovering to end the day up 1.1%. Elsewhere, the Shanghai Composite Index reversed losses and ended the session up 0.1% as market optimism about an injection of government easing lifted shares.
Australian shares Thursday eked out a small gain as higher oil prices boosted energy stocks, helping to offset a falling health-care sector. The S&P/ASX 200 ended up 10.1 points, or 0.2%, at 5475.8. Companies linked to the oil-and-gas business were the biggest winners. After rallying for much of July as investors sought defensive stocks, shares in the health-care sector have been heading south in recent days. Banks took their lead from higher U.S. financial stocks, but gave up some of their gains after Australian Prime Minister Malcolm Turnbull said the country's major commercial banks would be forced to face lawmakers for questioning over their interest-rate policies.
Copper prices fell to a three-week low, weighed on by a stronger dollar and doubts about growth in China, the world's largest consumer of the metal. Copper for September delivery was recently down 0.9% at $2.1790/t. Other base metals were mixed. Aluminium closed down 1.1% at $1,612/t, zinc was down 0.8% at $2,253/t, nickel was down 1.2% at $10,566/t, lead was down 0.6% at $1,783/t and tin was up 0.4% at $17,999/t.
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