As the world watches China recover from the pandemic and reopens its economy, there is growing optimism in the global financial market. This optimism is reflected in the rise of world equities on Monday, as inflation slows and supply fears recede.

In Europe, gas prices hit a 16-month low due to mild weather and a lack of winter supply fears. This is a stark contrast to last year, when gas prices surged due to Russia's invasion of Ukraine.

Similarly, oil prices also fell. Analysts at Energi Danmark noted that "the panic-like situation from last year has been replaced by confidence that Europe will get through this winter without any (gas) supply issues."

it is important to note that last year, markets took a battering due to surging inflation and aggressive interest rate hikes from the Federal Reserve and other central banks.

The Optimism Extends 100%

This optimism extends to the stock market, as equities have won solid support this year due to the diminishing fear of a recession.

This is supported by data that shows US inflation at its lowest since October 2021, which has led to hopes that the Federal Reserve will lift interest rates by 0.25 percentage points next month. This has eased worries about a possible recession for the world's largest economy and beyond.

The country's emergence from zero-Covid and pledges to boost key sectors

China is Rising

In China, despite expecting to report its worst annual growth since 1976, the country's emergence from zero-Covid and pledges to boost key sectors, such as the tech sector, are raising hopes for a strong rebound.

This is reflected in the rise of market majors, such as Alibaba stock and Tencent, as investors become more willing to take riskier bets. China's emergence from almost three years of strict virus containment measures is widely expected to give a major boost to the global economy.

However, it is important to note that there are some concerns in the market. Michael Hewson at CMC Markets said that oil prices are suffering as there is little indication of a boost in demand in China.

He noted that "crude oil prices have also pulled back from last week’s peaks with little sign, as we approach Chinese New Year, of a significant pick-up in demand."

Ssigns of optimism as world equities rise, gas prices hit a 16-month low

The global financial market is "Going Up"

The global financial market is showing signs of optimism as world equities rise, gas prices hit a 16-month low, and China reopens its economy.

This optimism is reflected in the solid support that equities have received this year, due to the diminishing fear of a recession. As inflation slows, and supply fears recede, investors are becoming more willing to take riskier bets, as seen in the rise of market majors such as Alibaba and Tencent.

While there are still concerns, such as the lack of boost in demand in China and the potential impact of the Federal Reserve's interest rate hikes, the market is showing promise for the coming months. With this in mind, it is important for investors to keep a close eye on these developments and make informed decisions

The Global Markets are showing signs of optimism as inflation slows and China reopens its economy. This optimism is reflected in the rise of world equities and the fall of gas and oil prices.

However, it is important to keep in mind that there are still concerns, such as lack of boost in demand in China and the potential impact of the Federal Reserve's interest rate hikes. It remains to be seen how these factors will play out in the coming months and if the optimism in the market will continue to hold.