London: Major equity markets advanced Tuesday after top Federal Reserve officials suggested a recent spike in US Treasury yields could prevent more interest rate hikes, while oil dipped one day after spiking on the Israel-Gaza conflict.
Europe’s main stock markets jumped more than 1.6 percent in afternoon trading stage, and after a largely upbeat session in Asia.
Wall Street stocks pushed modestly higher at the opening bell, adding to gains posted on Monday.
Oil prices dropped, having soared Monday after Palestinian group Hamas unexpectedly launched a deadly attack on Israel, stoking fear of spreading unrest in the crude-rich Middle East.
“Equity markets are bouncing back on Tuesday after a risk-averse start to the week, buoyed… by some promising Fed commentary,” said analyst Craig Erlam at trading firm OANDA.
“It would appear the recent surge in bond yields hasn’t gone unnoticed at the central bank, to the extent that Fed officials are coming across as less hawkish in their views.”
Yet traders remained on edge as Israel carried out retaliatory attacks in Gaza.
The death toll in Israel has surged above 900 from the worst attack in the country’s 75-year history, while Gaza officials have reported 687 people killed.
“It is perhaps a little surprising that markets have bounced back as quickly and strongly as they have given the clear risk aversion we saw at the start of the week,” added Erlam.