FROM MORRISON SECURITIES PTY. LTD:

U.S. STOCK MARKETS

U.S. stocks posted their biggest percentage gains of the year Wednesday as investors read remarks by central bankers in Europe and the U.S. as a signal that more monetary stimulus may be on the way.

The Dow Jones Industrial Average jumped 286.84 points, or 2.4%, to 12414.79, and the euro rose 1% to trade well above $1.25. The Dow's gain comes one day after the blue-chip index snapped a four-day losing streak, putting it back in positive territory for the year.

The benchmark hadn't seen back-to-back gains since late April. Bank of America climbed 7.6%, its best performance since January, while United Technologies jumped 3.9%.

The Standard & Poor's 500-stock index rose 29.63 points, or 2.3%, to 1315.13 and the Nasdaq Composite climbed 66.61 points, or 2.4%, to 2844.72.

The Dow and S&P percentage increases were the biggest since December, while the Nasdaq's was the largest in more than two weeks.

The gains came as European Central Bank President Mario Draghi said markets were underestimating political leaders' commitment to addressing the euro crisis.

That suggested to some investors that the ECB would be prepared to act once that happened. Mr. Draghi said that a few members of the ECB's rate-setting committee were in favor of a rate cut.

The Fed's Beige Book report on economic conditions across its 12 districts showed that the economy continued to expand at a moderate pace.

On Thursday, Fed Chairman Ben Bernanke will appear before Congress. That comes ahead of the Fed's next rate-setting meeting on June 19 and 20.

All of the Dow components and all 10 sectors of the S&P 500 traded in positive territory. Only 11 of the S&P 500 components traded lower.

Leading the gains were financial and energy stocks, which have suffered the most in recent weeks amid rising concerns about an economic slowdown.

Bank of America, United Technologies and Exxon Mobil were among the Dow leaders. Home builder stocks also leaped after Hovnanian Enterprises reported strong quarterly earnings and said it believes the industry is in the early stages of a recovery. Hovnanian soared 18%, lifting other homebuilder shares. PulteGroup jumped 7.4%, while Home Depot rose 3.4%.

EUROPEAN STOCK MARKETS

European stocks rose sharply Wednesday as investors shrugged off the European Central Bank's decision to leave policy unchanged and focused instead on the potential for further stimulus from the U.S. Federal Reserve and signs that officials are stepping up efforts to rescue Spain's ailing banks.

The Stoxx Europe 600 index closed up 2.3% at 239.95. The U.K.'s FTSE 100 finished 2.4% higher at 5384.11, Germany's DAX ended up 2.1% at 6093.99, snapping a five-day losing streak, and France's CAC-40 rose 2.4% to 3058.44.

Spain's IBEX 35 index rose 2.4% to 6418.90. Bank stocks posted solid gains across Europe, with the Stoxx Europe 600 index for the sector closing 3.9% higher.

Even after Moody's Investors Service lowered its investment-grade ratings on six German banks by one notch because of increased risk of further shocks from the euro-zone debt crisis, Commerzbank, one of the banks that was downgraded, ended up 4.6%.

Moody's move is part of its ongoing review of over 100 European banks and was widely anticipated by the market. In Spain, banks rose after Germany's Sueddeutsche Zeitung reported the European Financial Stability Facility may be permitted to lend money to Spain's bank rescue fund, effectively paving the way for a recapitalization plan for the country's ailing banks.

Shares of BBVA added 3.2%, while Banco Santander rose 2.6%. In London, Barclays soared 8.2%, Royal Bank of Scotland surged 6.7% and HSBC advanced 4.7%. Shares of Lloyds Banking Group also gained, up 5.2%, after the company said it is selling a portfolio of GBP809 million of Australian corporate real estate loans for GBP388 million in cash.

In France, Credit Agricole rose 3.6%, BNP Paribas gained 4.2% and Societe Generale added 3.1%.

The ECB kept interest rates unchanged at 1.0%, as widely expected, but comments from the bank's president, Mario Draghi, briefly took some of the shine off stocks.

He said growth remains weak and the economic outlook in the euro zone is subject to increased downside risks, leaving the door open for a rate cut in July.

Despite the worsening outlook, Mr. Draghi only announced the extension of low-rate, short-term funding for banks, disappointing some in the market who had hoped for more aggressive measures.

Helping to offset Mr. Draghi's comments were hopes the European Stability Mechanism could inject capital directly into euro-zone banks. Such a move is being considered, according to a senior European Union official, the advantage being that it wouldn't add to countries' debt levels.

At the same time, market participants pointed to rising hopes that the Federal Reserve will announce more quantitative easing at its June 20 meeting, especially given last week's dismal nonfarm payrolls figures.

With this in mind, Federal Reserve Chairman Ben Bernanke's testimony on the economic outlook before the U.S. congressional joint Economic Committee on Thursday will be closely watched.

Among other stocks, Petropavlovsk PLC surged 9.7% as UBS lifted the miner to buy from neutral. BP PLC rose 1.2% and Royal Dutch Shell PLC added 1.9%. Rio Tinto PLC jumped 4.6%. French oil major Total SA rose 1.4%.

ASIA-PACIFIC STOCK MARKETS

Asian markets climbed Wednesday on hopes central banks in the U.S. and Europe will act to help boost the slowing worldwide economy.

Risk sentiment also benefited from a Wall Street Journal report, citing interviews and Fed speeches, saying that the U.S. central bank is mulling new measures to aid growth, though its meeting later this month may be too soon for conclusive decisions.

In China, too, there were signs of possible further easing, after the state-run China Securities Journal ran a front-page commentary saying that China should cut interest rates at the appropriate time.

That helped push Hong Kong's Hang Seng Index up 1.4% to 18520.53. The China Shanghai Composite however, finished flat at 2309.55.

Hong Kong-listed banks rose, with HSBC Holdings PLC up 2.6% and Bank of Communications Co. up 2%. Insurance firms also performed well. Ping An Insurance Group Co. rose 3.5% and China Life Insurance Co. added 2.2%.

Property developers fell in China after the official Xinhua News Agency quoted a spokesperson at the housing ministry as saying Chinese authorities will continue to implement measures to curb the property market without wavering.

China Vanke dropped 1.4%, Gemdale Corp. lost 0.9% and Beijing Vantone fell 1.5%.

A weakening yen helped Japan's Nikkei bounce back 1.8% to 8533.53, though low trading volumes suggested investors might just have been closing their short positions ahead of the European Central Bank meeting.

There was a broad recovery in Japanese car companies as the weakening yen attracted investors back in to the sector: Toyota Motor and Nissan Motor both climbed 2.5%, while Honda Motor ended 2.8% higher. Shares in video-games company Nintendo were down 1.8% as the next generation of the Wii game system disappointed.

COMMODITIES

Base metals closed mostly higher on the London Metal Exchange Wednesday, buoyed by a weaker U.S. dollar against the euro and rising equities as traders remain focused on macroeconomic indicators to determine future movements in base metals.

At the close, LME three-month copper was 0.7% higher at $7,410 a metric ton while aluminum was up 0.3% at $1,979.0/ton.

Meanwhile, zinc was down 0.6% at $1,878/ton and nickel closed barely changed at $16,090/ton. Oil futures rose Wednesday after Iran issued a warning over talks about its nuclear program that are scheduled for later this month.

Prices also got a boost from expectations central banks around the world could enact further stimulus measures. Iran warned the European Union that delays in holding preparatory meetings ahead of talks in Moscow could jeopardize the talks' success.

The warning was reported by state news agency IRNA. Light, sweet crude for July delivery settled 73 cents, or 0.9%, higher at $85.02 a barrel on the New York Mercantile Exchange.

It was the third-straight session of gains. Brent crude on the ICE futures exchange settled up $1.80, or 1.8%, to $100.64 a barrel.

Gold and silver prices surged, continuing a rebound from their recent lows as investors bet that easy-money policies from central banks in Europe and the U.S. would drive demand for the precious metals as currency alternatives.

The most-actively traded gold contract, for August delivery, rose $17.30, or 1.1%, to settle at $1,634.20 a troy ounce on the Comex division of the New York Mercantile Exchange, the highest settlement price since May 7. Silver for July delivery gained 3.8% to settle at $29.488 a troy ounce, the highest settlement since May 7.