Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Shares surge on China's factory rebound, trade optimism

Stock MarketsApr 01, 2019 07:36AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. The German share price index DAX graph at the stock exchange in Frankfurt

By Ritvik Carvalho

LONDON (Reuters) - Global stocks surged on Monday, extending gains from their best quarter since 2010, as strong Chinese factory activity data and signs of progress in U.S.-China trade negotiations gave investors reason to cheer.

European stocks posted their best daily gains since mid-February, with the pan-European STOXX 600 index up 0.8 percent. Germany's trade-sensitive DAX outperformed with a 1 percent rise, helped by gains in auto maker stocks. (EU)

MSCI's All-Country World Index, which tracks shares in 47 countries, was up 0.4 percent on the day. It had just posted its best quarter since 2010. S&P 500 futures were up about 0.7 percent, indicating a higher open on Wall Street. (N)

"Investors' sentiment seems to be tilting to the side of optimism at the beginning of the second quarter, following a robust manufacturing report from China," said Konstantinos Anthis, head of research at ADSS.

China's official purchasing managers' index (PMI) released on Sunday showed factory activity unexpectedly grew for the first time in four months in March. A private business survey, the Caixin/Markit PMI, released on Monday, also showed manufacturing.

"This news helps ease market participants' worries over the odds of an upcoming recession on a global scale, even though there are plenty of signs suggesting caution," Anthis said.

Recent signals from bond markets have alerted investors to the possibility of an slowdown in the global economy. Yields on short-dated government bonds in the United States had fallen below those of longer-dated bonds - a phenomenon known as yield curve inversion, which has preceded every major recession.

"We don't see recession in 2019 or early 2020 — we believe the Federal Reserve unambiguously ending three years of tightening, and other central banks’ dovish tilts, have extended the cycle," wrote Bob Michele, CIO and head of global fixed income at J.P. Morgan Asset Management in a note to clients.

"We left the probability of recession unchanged at 10 percent, although even a minor policy error could raise that."

The 3-month-to-10-year yield spread has since pulled back from negative territory and stood around 3 basis points.


Earlier in Asia, MSCI's broadest index of Asia-Pacific shares outside Japan added 1 percent and the Shanghai Composite Index rallied 2.6 percent.

Australian stocks climbed 0.6 percent, South Korea's KOSPI gained 1.3 percent and Japan's Nikkei advanced 1.4 percent.

"The rebound (in the Chinese data) likely reflects both the resumption of production after the Chinese New Year break and renewed stimulus and policy easing," UBS strategists wrote in a note to clients.

"We expect China to continue easing policy, with signs of economic stabilization backing our overweight position on offshore Chinese equities in our Asia portfolios."

Stocks in Asia also took their cues from Wall Street, with the S&P 500 posting its best quarterly gain in a decade on Friday amid trade optimism.

The United States and China said they made progress in trade talks that concluded on Friday in Beijing. Washington called the negotiations "candid and constructive".

In currencies, the dollar fell 0.18 percent against a basket of currencies to 97.112.

Sterling was over half a percent higher to the dollar at $1.3104 on Monday as investors prepared for British parliament to vote on a series of Brexit options. Some hoped the current uncertainty will end in a softer Brexit than Prime Minister Theresa May's defeated withdrawal agreement.

The Australian dollar advanced as much as 0.45 percent to $0.7127, also benefiting from the China data. The Aussie is sensitive to shifts in the economic outlook for China, the country's main trading partner. It last traded 0.25 percent higher at $0.7113.

The euro rose 0.1 percent to $1.1230.

Oil rose, building on its largest first-quarter gains in nearly a decade, as tight supply and positive signs for the global economy supported prices.

U.S. West Texas Intermediate futures gained 0.95 percent to $60.71 per barrel. Brent was 1.3 percent higher at $68.47 per barrel.

Shares surge on China's factory rebound, trade optimism

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Christian Busse
Christian Busse Apr 01, 2019 2:13AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
trading hot air
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email