Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Shares grind towards record high as China trims key rate

Stock MarketsNov 18, 2019 04:39AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Passersby are reflected on a stock quotation board outside a brokerage in Tokyo

By Marc Jones

LONDON (Reuters) - World shares were close to a record high on Monday, after Beijing surprised markets by trimming a key interest rate for the first time since 2015.

In the latest show of support for its economy, China's central bank cut rates on seven-day reverse repurchase agreements by five basis points to 2.50%.

The news helped Asia's main markets close higher (CSI300) (N225) (HSI) and Europe followed suit, though 0.1% to 0.3% moves showed the initial reaction was cautious.

It did nudge MSCI's 49-country world share index <..MIWD00000PUS> 0.12% higher to leave it less than 1% off the record high it set back in early 2018.

"It is a slow start to a slow week, but risk is marginally on," said Societe Generale (PA:SOGN) strategist Kit Juckes.

He added it was now hard to avoid concluding that China was slowly easing monetary policy, having held off in recent months, perhaps wary of drawing fresh criticism from U.S. President Donald Trump during trade talks.

"Maybe that's what 5 basis points is all about. It's not rocking the boat, but it's a shift."

The pan-European STOXX 600 index (STOXX) was extending its six-week winning streak. The index is only 8 points short of its own record high of 415.18 points hit in mid-April.

Japan's Nikkei (N225) gained 0.5% and was just short of its recent 13-month top. E-Mini futures pointed to S&P 500 (ESc1) adding to Friday's record highs. (N)

Beijing's latest policy bolstered to hopes it might also be more serious about making progress in trade talks with the United States.

On Saturday, Chinese state media said the two sides had "constructive talks" on trade in a high-level phone call that included Vice Premier Liu He, U.S. trade representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

"More than in previous rounds, we see momentum toward reaching at least a limited trade deal, and certainly a mini-deal would remove some of the negative sentiment overhang for the real economy and markets," said Patrik Schowitz, global multi-asset strategist at J.P. Morgan Asset Management.

"We have upgraded our outlook on equities as an asset class," he added. "Emerging-market equities are now our most favoured region alongside U.S. large-cap equities."

LOOKING TO THE FED

The dollar was little changed against other major currencies on Monday and within recent trading ranges. Volatility in the market has been the lowest in decades recently and shows no sign of shifting.

The dollar rose against the safe-haven yen to 108.94

The euro traded at $1.1063 (EUR=) having found support at $1.0987 last week. Investors are waiting for the first major speech by European Central Bank President Christine Lagarde, due on Friday, for clues on future policy.

Sterling gained to $1.2952 as more polls showed the Tories ahead in the campaign for Britain's Dec. 12 election.

The dollar and bonds are likely to be sensitive to minutes of the Federal Reserve's last policy meeting, set to be released on Wednesday.

"The minutes are likely to reiterate that the U.S. economy is 'solid' and that current monetary policy settings are 'appropriate', which would support the dollar," said Joseph Capurso, a currency analyst at Commonwealth Bank of Australia.

However, he noted a report on October U.S. retail sales released on Friday suggested previously strong consumption might be slowing.

"Any further weakness in consumption could warrant a material reassessment of the outlook by the FOMC.  Under our baseline, the FOMC would most likely start cutting interest rates again in 2020," said Capurso.

Spot gold fell to $1,459 per ounce .

Oil prices also fell, after Brent touched a seven-week high on Friday. [O/R] Brent crude (LCOc1) futures dropped 18 cents to $63.12 a barrel. U.S. crude (CLc1) slipped by 4 cents to $57.69.

Shares grind towards record high as China trims key rate
 

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 Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
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 (2)
Lara Kiri
Lara Kiri Nov 18, 2019 2:08AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
In October, the market was betting on a deal signed mid Novemeber. We are mid November but US and China are still on "constructive talks" !! Same as Brexit, never happened but hopes and more hopes, in fact bla bla and mopre bla bla. With the better than (the very low) expectations, it is an other way to hide the poor statistic results.
Steven Chen
Gamer_LG Nov 18, 2019 12:18AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
if trade talk goes along the line of Huawei removed from black list and tariff rollback, in return China buys farm good, then yes. it is a great chat... just not for trump. we'll see if trump has what it takes to be different than previous presidents.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
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 Investing.com'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
or
Sign up with Email