Bernanke`s comments help raise global stocks, oil prices

U.S. Federal Reserve Chairman Ben Bernanke helped raise global stock markets and oil prices Monday by sending a strong message that the Fed will maintain its loose monetary policy to boost the economy despite signs of recovery.

In a speech to the National Association for Business Economics` spring conference, he said the U.S. job market remains weak despite three months of strong hiring. Further job gains will probably require stronger consumer and business demand and the Fed’s existing policies will help boost economic growth, he added.

Many interpreted his comments to mean that the Fed will likely freeze short-term interest rates for the time being despite signs of economic recovery. Others went as far to say the Fed might start a third round of quantitative easing.

The Dow Jones Industrial index soared 160.90 points (1.23 percent) to close at 13,241.63 Monday. The S&P 500 jumped 1.39 percent and NASDAQ 1.78 percent.

Stocks rose in Europe Monday, including those of the U.K. (0.82 percent), Germany (1.19 percent) and France (0.74 percent). In line with global markets, Korea’s benchmark KOSPI was up 20.57 points (1.02 percent) to close at 2,039.76 Tuesday.

Japan’s Nikkei average soared 2.36 percent.

Global oil and gold prices increased as well. West Texas intermediate crude rose 0.2 percent to close at 107.03 U.S. dollars per barrel. Gold jumped 1.4 percent to close at 1,685.6 dollars per ounce, the largest increase in a month.

Lee Sang-jae, a Hyundai Securities analyst, said, “Bernanke’s comments on quantitative easing are likely to lead to volatility in the stock market. Though he didn’t say it explicitly, he indicated a third round of quantitative easing.”

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