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Despite Higher Consumer Prices In China, Investors Are Cheering The Kick

Published 07/09/2013, 08:37 AM
Updated 02/02/2022, 05:40 AM

Asian markets closed strongly up today by recovering some of their losses made yesterday. Most of these gains came due to an upbeat earning season which was kicked off yesterday by Alcoa after the US market close. However, not all Asian indices loved this news as home grown worries took over investor’s appetite for risky assets.

The economic data released in China showed that the consumer price index increased to 2.7% which was well above the expectations of 2.5% but still under the government target level of 3.5%. Most economists would agree that this data could further strengthen the idea of tightening the monetary policy by the People Bank of China rather than any hopes of easing.

The Nikkei Index was the best performing index during the session which closed with a gain of 2.58%. The index is up nearly 4.48% for this week. The Hang Seng index was the second best performer and closed with a gain of 0.49%. The Shanghai index also managed to close to in a positive territory despite the disappointing economic data and closed with a gain of 0.34%.

The technology sector was one of the best performing sectors in Hong Kong during the session. Shares of China Mobile gained nearly 0.6%. China Resources Land Ltd also soared by nearly 1.2%. Property developers came under pressure in Shanghai on the back of disappointing economic data and shares of Gemdale Corp and poly Real Estate group Co. both closed with a loss of -4.4% and -2.8% respectively.

European stock markets are also trading sharply higher during the early hours of trading. Investors are cheering the news that the officials from the EU have agreed to unleash another trench of the aid payment for Greece which could help the country to stand on its feet once again. However, the Eurozone’s finance minister did set the condition that Greece has to respect and meet its condition which was set during the second international bailout.

The FTSE 100 Index is the best performing index during the session which is trading up with a gain of 1.07%. The index is up nearly 3.35% for this week. The DAX index is the second best performer and is also trading up with a gain of 1.02%. The CAC 40, FTSE MIB and IBEX 35 are also trading up with a gain of 0.71%, 0.77% and 0.78% respectively.

DISCLOSURE & DISCLAIMER: The above is for informational purposes only and NOT to be construed as specific trading advice. responsibility for trade decisions is solely with the reader.

by Naeem Aslam

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