– Japanese stocks soar. The Nikkei 225 Stock Average surged 7.7 percent to 18,770.51 in Tokyo, posting its biggest one-day gain since October 2008. The huge move came after a week that saw a large increase in short-selling on the Tokyo Stock Exchange over the past week, with short-selling accounting for 40 percent of trading since September 1, the highest proportion since the exchange started keeping records in 2008. Japanese Prime Minister Shinzo Abe has pledged to follow through with a 3.3 percentage point cut to Japan’s 34.62 percent corporate tax rate in 2016, which may have also helped propel stocks upwards.
– China rallies again. The Shanghai Composite Index rallied 2.29 percent, building on Tuesday’s gains. New market regulations in China have effectively killed what was once the world’s biggest futures market, with volumes in CSI 300 Index and CSI 500 Index futures dropping 99 percent from their June high on Tuesday. Speaking after markets closed, Chinese Premier Li Keqiang said that China will be able to maintain mid- to high-speed growth.
– U.K. factory output slumps. U.K. industrial production for July unexpectedly fell 0.4 percent, the Office for National Statistics said, missing economists’ forecasts for a 0.1 percent increase. The figure comes ahead of the Bank of England’s latest interest-rate decision to be announced Thursday. Economists are expecting no change in rates, but a less dovish tone in the minutes which are due to be published at the same time as the meeting. Sterling dropped for the first time in three days against the dollar following the release of the weak data.
– Bank of Canada. Only one of the 24 economists surveyed by Bloomberg expects the Bank of Canada to make a change in interest rates when the central bank announces its decision at 10 a.m. in Ottawa today. This is the last meeting before Canada’s October 19 general election. A decision not to cut rates may be seen as a boost to Prime Minister Stephen Harper’s argument that the economy is «back on track.» The central bank’s next interest rate
– Japan’s Nikkei surges 8% as global markets rebound. European markets opened with gains of about 2%, but Japan’s Nikkei was the standout performer, adding 7.7% in its best day since the global financial crisis.
The enthusiasm was infectious in Asia. Hong Kong’s Hang Seng added 4%, Taiwan’s main index gained 3.6% and India’s Sensex was trading 1.7% higher. In China, the Shanghai Composite advanced for a second straight day, gaining 2.3% on signs that Beijing is considering further measures to boost the economy.
Fast Retailing (FRCOF), best known as the owner of clothing brands Uniqlo and Theory, advanced 10%. The retailer is by far the largest component of the Nikkei index.
– Apple’s stock is a screaming buy right now. Apple’s stock fell to a 52-week low of $92 a share when the Dow plunged more than 1,000 points on August 24. It may not hit that level again anytime soon. Shares of Apple (AAPL, Tech30) have since bounced back more than 20% to around $111.50.
And with new products, probably the iPhone 6S, a bigger iPad and an updated Apple TV, set to be announced on Wednesday, there’s reason for Apple fans (and average investors) to be excited again. Apple, after all, is the world’s most valuable company and remains a darling of big institutions like Vanguard, Blackrock, Fidelity and T. Rowe Price.
– IRS rejects Yahoo’s tax-free request on Alibaba spinoff. Stock tanks. Yahoo (YHOO, Tech30) had been hoping the IRS would bless the spinoff as a tax-free transaction, saving investors huge sums of money. Yahoo owns about 384 million shares of Alibaba (BABA, Tech30), worth about $23 billion. The spinoff is the centerpiece of CEO Marissa Mayer’s plans to return cash to shareholders.
However, Yahoo told investors in a filing Tuesday that the IRS has rejected its request for a special tax ruling on the deal. Shares of Yahoo fell 4% in after-hours trading following the news.