Global stocks surge to best week since August

• Published On: 08 November 2024 at 16:34

Global stock markets are on track for their best week since August, with investor sentiment boosted by U.S. President Donald Trump's decisive election victory and China's fresh round of fiscal stimulus aimed at supporting its struggling economy.

Following the anticipated quarter-point interest rate cut by the US Federal Reserve, market attention shifted to the aftermath of Tuesday's US elections and recent developments in China.

Wall Street's optimism was fuelled by expectations that Trump's victory would result in reduced regulations and tax cuts, potentially boosting the US economy.

However, while the week has been strong for stocks, with the S&P 500 index up more than 4%, some caution emerged on Friday.

U.S. stock futures fell slightly, and Europe's STOXX 600 index fell 0.7%, indicating some market trepidation. The offshore yuan weakened, and shares of Chinese companies listed in the United States, as well as sectors exposed to China in Europe, fell.

"What you'll get as a result of the clean sweep is a mandate to boost the US economy. As a result, taxes will fall, bureaucracy will be reduced, and regulation will become less stringent', said Guy Miller, chief markets strategist at Zurich Insurance Group. "Between now and year-end, there is a tailwind for US stocks. The United States market has potential."

Meanwhile, China unveiled a debt package worth 10 trillion yuan ($1.40 trillion) to help alleviate local government financing pressures and stabilise its ailing economy.

China's Finance Minister, Lan Foan, announced that additional stimulus measures are on the way, but some analysts believe Beijing will be cautious about fully deploying its financial resources until US President-elect Donald Trump takes office in January.