World stocks rise on central bank cuts

Individuals learning how to trade may have noticed that the move by central banks to cut funding costs and the positive noises emanating from eurozone discussions have seen world shares move towards their biggest weekly gain in three years.

World stocks on the MSCI index jumped by 0.5 per cent today (December 2nd), making a weekly aggregate of 8.5 per cent, reports Reuters.

This was mirrored in the European market with the FTSEurofirst 300 Index up 1.4 per cent to 988.83 points, having risen nine per cent over the course of the week.

The mood has been lifted by German chancellor Angela Merkel's vote of confidence for the euro and data showing unexpected buoyancy in the US economic situation.

However, the US economy is arguably not the most important factor in the global financial market.

"Focus is on what could happen with the political process in Europe and that will take precedent," Johan Javeus, chief strategist at SEB in Stockholm, told the news provider.

European shares fell yesterday as investors became frustrated at the lack of decisive movement from central banks, with Lothar Mentel, chief investment officer at Octopus Investments, describing their actions as "tinkering" to Reuters.

Posted by Clive Arneill