(MENAFNEditorial) There was an encouraging 1 percent gain in the MSCI to recoup around 3.5 percent of last week''s painful loss. Meanwhile, Australian stocks jumped nearly a percentage point also, with the Nikkei rising 1.7 percent.
Positive signs appeared around Europe as the markets in London and Germany were observed starting about 1.5 percent higher. There was also a 0.3 percent gain for S & P 500 EMINI futures.
Following the staggering three trillion dollar loss the markets suffered in the first few days after the UK referendum on the E.U., any hint of recovery was more than welcome and sturdy U.S. economic data also contributed.
However, the general mood in global finance circles is still extremely cautious as few can predict the effect a British exit from its economic bloc will have on its own economy, its currency and the well-being of the rest of Europe.
"The general sentiment is, of course, one of uncertainty," says Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management.
He added, "The E.U. bigwigs may have to wait a while to set the Brexit plans in motion as the internal politics in Britain right now is pretty much in turmoil."
The first observed knock on effect was the drop in the pound, which slumped 0.3 cents to finish at a 30 year low of $1.3331. Meanwhile, the euro lifted only slightly to $1.1065. The yen, long regarded by experts as a "safe-haven" currency, steadied against the greenback at 102.34.
It seems most investors are depending on central banks to save the day with new stimulus packages to prop up the markets in this crucial period.
Shinzo Abe, the Japanese PM, has said in recent press releases that he has urged the Bank of Japan to ramp up easing in order to sustain the necessary liquidity for the markets to function as normal.
The latest comments from the Fed, especially from Governor Jerome Powell, has confirmed that policymakers will not be able to hike interest rates until at least 2017 and may even have to cut the rates if the U.S. economy starts to slide.
Overall, there was a much calmer outlook in the U.S than in Europe. The Dow finished with a 1.5 percent gain and there was a 1.8 percent jump in the S & P 500. Recent reports showed the American economy has seen a 1.2 percent annualized expansion in Q1.
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