Asian shares are expected to consolidate gains on Tuesday as the Chinese currency and shares show signs of stability, oil prices rebound, and solid USA consumption data suggest last week’s sell-off was overdone.
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KEEPING SCORE: Japan’s benchmark Nikkei 225 index added 0.2 percent to 16,054.43 after soaring 7.2 percent the day before, which was its biggest daily gain since September. Chinese shares dropped on their…
In energy trading, benchmark US crude oil futures rose 29 cents to $29.73 a barrel in electronic trading on the New York Mercantile Exchange.
“I believe market pessimism, particularly towards the U.S. economy, that took hold at the start of the year was exaggerated”, said Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo.
Joshua Mahony, market analyst at London-based brokerage IG, says it’s likely to be only “a matter of time before we see the sellers dominate once more”.
STIMULUS HOPES: With U.S. markets closed for a holiday and therefore providing no guidance in either direction, the global stock rally extended into a second day.
But U.S. retail sales data on Friday showing firm growth allayed some fears – at least for now – that the U.S. economy could be dragged into recession as growth stumbles in many parts of the world.
Also boosting sentiment was China’s yuan, which hit its strongest level against the dollar this year after the central bank guided it sharply higher.
The dollar has also gained more than 1 per cent versus the Swiss franc this week after slipping to a 4-month low on Thursday against the safe-haven currency.
HONG KONG (AP) – World stock markets mostly rose Tuesday as a strengthening Chinese currency and hopes for more central bank stimulus gave investors relief from the mauling that markets have suffered so far this year.
The euro, which soared to a 4-month high of US$1.1377 last week, was flat at US$1.1165 after losing 0.9 per cent on Monday, when market movements were slightly exaggerated as the U.S. markets were closed for a national holiday.
According to BBC, trade numbers released Monday for January revealed China’s exports fell over 6 percent for the month compared to the previous year and imports sunk over 14 percent.
Oil prices picked up on news of an uncommon private meeting of top authorities from the world’s largest oil producers provoked theory of an inevitable arrangement to handle a profound supply excess.
Currency traders are pulling back from bets on another devaluation of the yuan as China strengthens support for the unit and prospects for a United States interest-rate increase dim. Other markets in Asia bounced too, including the Hang Seng in Hong Kong, which ended the session 3.3 percent higher.
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As risk supposition enhanced, yields on top-rated government security ascended, with the 10-year U.S. Treasuries yield growing 4.7 basis points to 1.793% from 1.746% at the last week ending. US crude futures CLc1 gained 4.4 percent to $30.72.
