Global Stock Markets Spring Higher
Global stock markets rose Friday as investors reacted to a mixed batch of global economic data and appeared confident that US-China trade talks will yield a positive outcome.
European stock markets showed solid gains by the close and Wall Street was also up in the late New York morning.
“The first day of the new month has started positively for equities,” said Fawad Razaqzada, market analyst at Forex.com . “Sentiment improved on the back of positive US-China trade talks and as major central banks have reiterated the need for interest rates to remain low for longer,” he said. This put markets “on course for a more positive end to the week”, said Craig Erlam, senior market analyst at Oanda trading group.
A better-than-expected reading on US economic growth lifted sentiment earlier in Asia while optimistic comments from a top White House economic advisor on the China-US trade talks also provided support.
You know things are getting bad for stocks when both the serial #VIX smashing by the NY #Fed and the obvious USD/JPY carry trade (USD/JPY bottomed same day as S&P btw) seem to be increasingly ineffective in propping up the S&P. pic.twitter.com/Jb6dJdfM2y
— David Brady, CFA (@GlobalProTrader) March 1, 2019
The gains helped Asia to another strong week despite disappointment over US-North Korea talks in Hanoi and tensions in Kashmir.Shanghai’s main stocks index led the gains, surging 1.8 percent and extending a rally that has seen it climb by about a fifth since the start of the year thanks to expectations over the US-China trade talks.
Adding to the interest in mainland equities was news that index compiler MSCI will increase the weighting of Chinese-listed stocks in its benchmark indices and nearly double the number of companies included. With those indices used by global funds for their investments, the move is expected to attract tens of billions of dollars more to the country’s markets.
In Europe, eurozone annual inflation rose to 1.5 percent in February, up from 1.4 percent in January, while unemployment in the single currency area remained stable at 7.8 percent.
On currency markets, the dollar traded mixed, while the pound eased amid jitters about Britain leaving the European Union this month, but investors still hoped that there will be some kind of Brexit deal in place by then. “The market is now moving on the premise that the US-China talks are making progress, and that ‘a no-deal Brexit’ would be avoided,” Resona Bank said in a commentary. However, it warned: “It should be noted that there are risks that ultimately there may be no deals.”
