A three-day rally on world equity markets stalled on Wednesday and the euro dipped as investors awaited the next moves by the world's major central banks to tackle declining global economic growth and Europe's fiscal crisis.
Risky assets began rising on Friday after U.S. jobs data eased concerns about global growth but supported hopes of a further policy easing by the Federal Reserve. Markets were also lifted by last week's promise by European Central Bank President Mario Draghi to ease borrowing costs for Spain and Italy.
"Sentiment is still broadly cautious - people realize there are still a lot of hurdles to be overcome. But investors can't ignore potential stimulus from central banks and what impact that's had on stock markets in the past," said Keith Bowman, equity analyst at Hargreaves Lansdown.
The Bank of England sharply cut its forecast for medium-term growth in Britain's economy due to worries that factors hurting growth since the financial crisis may be longer-lasting than first thought.
Investors believe that the gloomy outlook may open the door to further policy easing by the Bank of England later this year.
A batch of Chinese economic data on Thursday will also draw attention to the nation's cooling growth rate and the potential for Beijing to take more action to support activity.
Read more: http://www.reuters.com/article/2012/08/08/us-markets-global-idUSBRE86F00620120808
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