The recent turmoil in global financial markets has raised fears that growth will falter this year. In Asia, Japan’s main stock index fell sharply, leading other Asian markets lower.
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European stock markets have opened higher following a rebound in the price of oil and despite another slide in Japan’s main stock index.
NLI’s Mr Ide said it was unclear if the market rally will be sustained because of the renewed yen strength and unstable crude oil prices. This 0.4 percent sequential contraction, reversed the 0.3 percent growth in the third quarter. Brent crude, a benchmark for worldwide oils, fell 38 cents to $32.98 a barrel in London. Dow futures gained 1.2 percent to 16,102.00.
Oil jumped 6 percent, helping to lift energy company shares. “Europe is continuing to look good”.
Thus, strategists, such as Takuya Takahashi from Daiwa Securities, believe that the Nikkei’s performance on Monday was simply a technical rebound, or a reaction to its massive loss during the previous week, reports Reuters.
Mr Matthew Sherwood, head of investment strategy at financial advisory group Perpetual in Sydney, told Bloomberg: “Markets are losing faith in central banks and their ability to stabilise the situation”. The sector is the worst performing part of the market this year because investors expect that low interest rates around the world will sap bank profits, but it rallied 4 percent Friday.
The Australian dollar shrugged off the downbeat China trade data and benefited from improved risk appetite, adding 0.7% to US$0.7152, while the kiwi added 0.4% to US$0.6652. Bank of America rose 74 cents, or 6.6 percent, to $11.90. The stock gained $1.71 to $17.22.
CHINA EXPORTS: Chinese shares were also weighed down by the latest monthly trade figures. For the overall week, though, European stocks are down sharply.
Wall Street futures have pushed higher following the news that retail sales in the world’s largest economy rose 0.2 percent during the month, helping to shore up markets at the end of what’s been a tumultuous week.
“It solidifies our view that the markets are pricing in a significantly higher probability of recession than what we think the fundamentals now dictate”, he said. Drops in the ranks of proprietary traders and market makers at banks and brokerages – individuals that can quickly help markets find their equilibrium – due to regulatory burdens have also added to the volatility. 64 points, or 0.88 percent, from Monday to 15,881.94, Xinhua reported.
Today’s surge is likely explained by bargain hunters looking at undervalued Japanese stocks after the huge sell-off last week which saw the index tumble more than 10%.
VISA EFFECT: Investors bid up shares in Square after Visa disclosed an ownership stake of nearly 10 percent in the mobile payment services company. France’s CAC 40 advanced 1.1 percent to 3,940.58. The stock lost $1.31 to $7.78.
EUROPE JUMP: Britain’s FTSE 100 closed 2 percent higher on Monday at 5,824.28 and Germany’s DAX gained 2.7 percent to 9,206.84.
Stocks soared in Tokyo on Monday, with the Topix posting its biggest gain in more than seven years, as investors judged shares had been oversold and a report showing Japan’s economy shrank more than expected last quarter boosted the outlook for central bank stimulus.
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It was a sharp turnaround from trading in Asia, where Tokyo’s Nikkei 225 plunged 4.8 percent to 14,952.61 after earlier sinking as much as 5.3 percent.
