SHANGHAI, Aug. 30 (SMM) – US stock prices surged on August 29th with no immediate QE3 need as said by Fed president Bernanke, and strong personal spending growth in the US. Climbing US stock prices also helped Shanghai metals gather strength to move upward during recent days.
According to US government data, July consumer spending rose a most 0.8% MoM during recent five months. Personal income also rose 0.3% MoM, which was in line with market expectation. Personal spending plays a significant role in the US economy. Following a 0.1% growth in June, the 0.8% growth helped boost confidence among generally pessimistic investors.
US stock markets surged overnight with supportive economic data, with the Dow Jones Industrial Average Index gaining 254.71 points or 2.26% to 11,539.25, the S&P Index up 33.28 points or 2.83% to 1,210.08 and the NASDAQ Composite Index up 82.26 points or 3.32% to 2,562.11. Rebound of US stock prices from previous lows shows improved investor confidence and will inject more upward momentum in base metals market.
From a general perspective, investor confidence for base metals has slightly improved. However, the market will keep fluctuating in the recent period before getting out of recent dilemma, and the fluctuation period is also expected to extend given tightening capital supply caused by widening reserve requirements in China as well as impact from house purchasing limit polices in 2nd-3rd tier cities in the country.