Bullish sentiment once again took the upper hand on global stock markets this morning after gains on US indices ended a run of big losses.
The FTSE 100 gained by more than 0.6 per cent at the market open, after yesterday sustaining its worst loss since the day after the Brexit vote.
Markets on the European mainland matched that buoyancy this morning, with the German Dax, French Cac 40, Italian FTSE MIB, and Spanish Ibex all gaining.
A semblance of normality returned to Asian markets this morning. Japan's Nikkei 225 index yesterday saw its biggest single-day fall since 1990, but edged up today. Australia's ASX 200 index also rose by 0.7 per cent, although shares in Shanghai and Hong Kong continued to fall.
The upward moves came after intense volatility on US exchanges which saw massive swings from loss to strong gains for the S&P 500, the American benchmark. The S&P 500 last night rose by 1.74 per cent, while the tech-heavy Nasdaq rose by 2.13 per cent.
The Vix "fear index", a measure of volatility on the S&P 500, last night hit its highest point since 2015 as markets whipsawed. Credit Suisse and Nomura were forced to withdraw products which allowed investors to bet against volatility rising.
Yet the measure of fear was not echoed in the sentiments expressed by most professional investors, who pointed to the low likelihood of a recession amid a strong global economy as a key reason not to sell.
Investors in the US last night flocked to cyclical stocks which benefit most from economic growth, such as technology stocks, banks and industrials, said Jasper Lawler, head of research at London Capital Group.
That was today backed up by the National Institute of Economic and Social Research, which today predicted the world economy will rise by 3.9 per cent this year, boosted by a strong 5.4 per cent pick-up in world trade.