Global stocks, bonds and commodities soared as the US Federal Reserve held off another rate rise and the Bank of Japan shifted its policy to prop up financial markets by holding its negative interest rate and surprising the market by announcing a target on keeping 10-year government bonds at or above zero.
With central banks continuing to try and boost growth and inflation, investors jumped back into trading expecting the era of easy money has some way to run.
Global markets rose the most since the Brexit vote in June and commodities continued their run with US oil reaching $46 a barrel.
The MSCI gauge of global equities climbed 1.1 percent in New York, with commodity companies leading the charge. Futures rose as much as 2.6 percent in New York.
On Wall Street, the Dow Jones industrial average closed up 163.74 points, or 0.9 percent, to 18,293.7. The S&P 500 finished 23.36 points, or 1.09 percent higher, to 2,163.12, and the Nasdaq Composite rose 53.83 points, or 1.03 percent, to close at a record high of 5295.18.
France’s CAC 40 rose 2 percent to 4,498 and Germany’s DAX added 1.9 percent to 10,636. London’s FTSE 100 was up 1.2 percent to 6,917. The Hang Seng was 0.3 per cent higher and Chinese mainland bourses around 0.6 per cent stronger.
“The market has come to the conclusion that everything is fine: central banks are still there, supporting equity markets and keeping yields low,” Daniel Morris, an investment strategist at BNP Paribas Investment Partners told The Wall Street Journal.
In Australia, miners led the charge on the ASX taking the S&P/ASX 200 Index up 35 points or 0.7 per cent higher at 5374.5, and the All Ordinaries up 37 points or 0.7 per cent to 5466.3.
Gold mining stocks soared. Newcrest Mining was up 6.9 per cent, Evolution Mining was 5.8 per cent higher and Northern Star Resources was up 6.6 per cent. The strongest performing stock in the ASX 200 was Saracen Mineral Holdings which soared 9.6 per cent.
BHP Billiton was up 2.7 per cent and Rio Tinto rose 3.3 per cent.