Global stock markets have rallied as investors await this week’s Federal Reserve meeting for signs of a possible turnaround in ultra-low interest rates and other economic stimulus.
London and Frankfurt opened higher while Tokyo also gained. Markets in China and Hong Kong remained closed for the holiday.
Trading has been muted as investors await Wednesday’s Fed meeting to see if US central bankers are becoming more rigid after a spike in inflation. No policy changes are expected immediately, but any change in language in Fed comments could raise fears of bond purchases and other incentives will stop.
“It is expected for the Fed to maintain its hyper-political stance and refrain from discussing any tapering for now,” Mizuho Bank said in a report.
London’s FTSE 100 rose 0.3% to 7,156.76 and Frankfurt’s DAX rose 0.5% to 15,775.29 in early trade. The CAC 40 in Paris rose 0.6% to 6,640.68.
On Wall Street, futures for the benchmark S&P 500 index and the Dow Jones Industrial Average were up 0.1%.
On Friday, the S&P 500 turned in a third weekly gain after rising 0.2%. The Dow Jones Industrial Average gained less than 0.1% while the Nasdaq rose 0.4%.
In Asia, the Nikkei 225 in Tokyo rose 0.7% to 29,161.80, while the Kospi in Seoul rose less than 0.1% to 3,248.36.
India’s Sensex closed 0.3% lower at 52,306.12. New Zealand and Bangkok gained while Singapore and Jakarta withdrew.
Fed officials say high inflation should be short-lived. This was backed by a report last week showing that the rise in consumer prices in May was mostly due to temporary factors.
In energy markets, US benchmark crude rose 51 cents to $71.42 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 62 cents to $70.91 on Friday. International oil price base Brent crude rose 62 cents to $73.31 a barrel in London. It rose 17 cents a barrel to $72.69 in the previous session.
The dollar fell to 109.69 yen from Friday’s 109.72. The euro rose from $1.2104 to $1.2104.