Market update: Equity bulls seem to be back behind the wheel

The S&P 500 index closed above the psychological 1500 level once again on Wednesday, rising 1.3% on the day. Investors took comfort from Ben Bernanke’s comments as he continued his testimony to Congress for the second day, reiterating support for the Federal Reserve’s stimulus policy. Several other factors also contributed to the renewed enthusiasm; pending home sales jumped 4.5% in January, there were rumours that the White House will hold a meeting to discuss the Sequester* on Friday, and finally a solid Italian government bond auction, that eased immediate concerns for the eurozone.

Asian markets took the baton from the US and major bourses closed up overnight. Gains are being led by the Nikkei (up 2.7%) where as expected Haruhiko Kuroda was nominated as the next governor of the Bank of Japan, raising expectations of fresh easing steps in April. European markets are also buoyant this morning, at the time of writing the FTSE Eurofirst 300 was up 0.6% while the FTSE 100 had gained 0.5%. The bullishness seems to be confined to equities, however, as safe haven assets are holding their recent gains while commodities are sending mixed messages.