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

China bounce pushes world shares toward six-month high

Stock MarketsAug 07, 2018 06:01AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. People walk past an electronic board showing Japan's Nikkei average outside a brokerage in Tokyo

By Marc Jones

LONDON (Reuters) - World shares edged toward a six-month high on Tuesday, as the biggest jump in Chinese stocks for over two years and an upbeat start for Europe followed Wall Street's best close since January.

The moves came despite a host of simmering global feuds. Oil prices ticked higher as the United States reimposed some sanctions on Iran, while the Turkish lira bounced back almost 2 percent from its worst day in a decade on Monday that had been prompted by a row with Washington. (IS)

The mood lifted overnight as Chinese stocks rebounded 2.7 percent on hopes of fresh government spending, following a four-day selloff that had knocked them down about 6 percent. (SS)

London (FTSE), Paris (FCHI) and Frankfurt (GDAXI) followed by rising 0.6 to 0.9 percent as Europe's investors cheered results from Italy's biggest bank UniCredit (EU) and oil firms and miners gained on the rise in crude prices. (SXPP) (SXEP)

"The Chinese have stabilized the yuan, the lira hasn't been annihilated this morning so once the sharp FX moves have calmed down and as long as the (company) earnings are good, you have a more risk friendly environment," said Societe Generale (PA:SOGN) strategist Kit Juckes.

Currency markets remained volatile although less so than in recent sessions as the dollar dipped.

The euro bounced to $1.1583 (EUR=) from a near six-week low despite a second day of disappointing German economic data, while Britain's pound made back some ground after Brexit worries had pushed it to an 11-month low. [/FRX]

Turkey’s lira recovered 1.7 percent from Monday's losses of more than 5 percent after Washington had moved to end duty-free access to U.S. markets for some Turkish exports. A report by CNN Turk that Turkish officials would go to Washington to discuss the strained relations helped the rise, although the lira remains close to a record low.

Already struggling with inflation at 14-year highs near 16 percent and political pressure on the central bank not to raise interest rates, the lira’s year-to-date losses are nearing 30 percent as jitters about foreign currency debt payments rise.

"Currently the impact of the lira's slide is mostly contained within the country. But fears of a default will begin to increase if the currency keeps depreciating," said Kota Hirayama, senior emerging markets economist at SMBC Nikko Securities. "Such a development could affect some European financial institutions," he added.

WALL STREET WHOOSH

An impressive global earnings picture and upgrades to the U.S. profit growth horizon outweighed the global trade tensions and the various emerging market dislocations.

Wall Street’s S&P 500 closed at its highest level since Jan. 29 overnight, less than 1 percent from its record high hit earlier that month.

The Vix volatility gauge closed at its lowest since Jan. 26. A surge in U.S. corporate earnings driven by tax cuts - they achieved an annual aggregate growth rate of about 25 percent in the second quarter - has prompted the likes of Citi to upgrade their end-2018 and 2019 earnings forecasts.

Wall Street buoyed market sentiment around the world, with Tokyo and Seoul both up 0.6 percent and Hong Kong closing up more than 1 percent along with Shanghai's big bounce.

In commodities, oil extended the previous day's rally after the imposition of U.S. sanctions against major crude exporter Iran took effect on Tuesday. [O/R]

Benchmark Brent crude oil futures (LCOc1) shook off earlier weakness and were 0.33 percent higher at $73.99 a barrel. They had gained 0.75 percent on Monday after OPEC sources said Saudi production had unexpectedly fallen in July.

On bond markets, borrowing costs for euro zone benchmark issuer Germany were pinned near their lowest levels in almost two weeks as concerns about global trade and turbulence in Italy continued to support demand for the least risky assets. [GVD/EUR]

The softer dollar helped metals. Copper was up 0.5 percent at $6,161.50 a tonne after retreating more than 1 percent the previous day. Gold, which is stuck near a one-year low, crawled 0.2 percent higher to $1,208.06 an ounce [MET/L]

China bounce pushes world shares toward six-month high
 

Related Articles

Surging Treasury yields add to ARK fund's 2021 woes
Surging Treasury yields add to ARK fund's 2021 woes By Reuters - Sep 28, 2021 4

By Lewis Krauskopf NEW YORK (Reuters) -A broad selloff in technology and growth names battered the flagship fund of star stock picker Cathie Wood’s ARK Invest, as investors...

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 (1)
Aug 07, 2018 3:52AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
like
 
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