Monday 26 February 2018

World markets rise, led by surge in Japanese stocks

Traders work on the floor of the New York Stock Exchange. Photo: Andrew Burton/Getty Images
Traders work on the floor of the New York Stock Exchange. Photo: Andrew Burton/Getty Images

Global shares rose yesterday, led by an 8pc surge in Japanese stocks and helping lift the dollar as the prospect of more economic stimulus from China soothed investors rattled by recent market turmoil.

European shares followed Asia higher. The pan-European FTSEurofirst 300 index .FTEU3 rose 2.4pc to a two-week high, led by miners tracking a sharp rise in metals prices on expectations of more stimulus in top consumer China.

In Dublin, Ryanair led stocks higher, powering up as much as 8pc at one stage after the company forecast record profits for the current year. After its results, Dalata Hotels stock rose 3.8pc to €4.185 a share.

The Iseq index of Irish shares ended up 1.7pc,

Globally, stock market gains were sparked by a rally in Chinese shares on Tuesday, when weaker-than-expected August trade reinforced investors' expectations that Beijing would act to bolster slowing growth in the world's second-largest economy.

China's Finance Ministry said yesterday that it would strengthen fiscal policy, boost infrastructure spending and speed up tax reform, helping lift Chinese shares for a second day. The Shanghai Composite closed 2.3pc higher and the CSI 300 rose 1.96pc, while Hong Kong's Hang Seng .HSI was up 4.5pc. Angus Gluskie, managing director of White Funds Management in Sydney, described yesterday's stock rally as a "speculative bounce".

"The market will remain susceptible to a return of negativity until we see signs of some improvement in the original causes of weakness, which were predominantly Chinese growth concerns," he said.

Signals from Prime Minister Shinzo Abe that Japan will cut corporate taxes pushed the Nikkei 225 stock index up 7.7pc, the most it has risen in a day since the depths of the global financial crisis in October 2008.

Investors' increased appetite for risk saw the dollar firm against the safe-haven yen and the euro. The single European currency was down 0.5pc at $1.1142 while the yen was 0.9pc weaker at 120.85 per dollar.

The dollar index .DXY, which measures the greenback against a basket of six major currencies, was up 0.4pc.

Another safe haven, German 10-year bond yields, rose 1 basis point to 0.69pc after Germany sold €3.2bn of the paper at an average yield of 0.69pc, attracting bids worth less than the €4bn on offer.

US 10-year Treasury yields also rose and were last up 3.4 bps at 2.23pc, their highest in a month. (Reuters)

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