Equity markets around the globe put in stellar performances on Tuesday, fuelled by substantial mining sector gains as an easing greenback and expectations of future inflation pumped the price of gold up to a new record high, while Australia’s decision to raise interest rates reassured on the economic front.
The FTSE 100 index gained 113.7 points or 2.3% to settle notably higher at 5,138.0. The FTSE 250 index put in a similarly strong performance, rising 218.7 points or 2.4% to 9,201.2.
The Reserve Bank of Australia’s overnight decision to increase its cash rate target to 3.25% represented the first G20 nation to feel confident enough to reverse previous rate cuts and highlighted the recent strengthening in economic sentiment.
In other economic news, UK house prices continued their climb in September, rising a higher-than-
UK manufacturing output, meanwhile, fell unexpectedly in August—down 1.9% month-on-month to its lowest level since the early 1990s, with the Office for National Statistics’ index of manufacturing coming in at 87.8. UK equity markets were unfazed, however, in light of a new record high gold price.
Gold futures hit $1,038 an ounce on Nymex, beating the previous record of $1,033.9 set in early 2008 as investors snapped up the yellow metal, which is traditionally seen as a hedge against inflation.
