Stocks erase losses on public works plan
Global stocks were mixed on a day when many markets were closed for a holiday. Japanese shares fell as the yen gained against the dollar, while Chinese equities recovered from earlier losses.
The Topix index slipped in Tokyo on trading volumes around 40 percent below the 30-day average. The Shanghai Composite Index erased a drop of as much as 1.3 percent, with construction stocks strengthening after the government said it aims to invest 1.8 trillion yuan ($260 billion) in highways and waterways next year.
India’s Sensex index resumed its decline, falling to the lowest in more than a month. The yen advanced for a fourth straight day and the rouble strengthened 1 percent.
A volatile year for financial markets is drawing to a close as investors assess the postUS election rally that’s added trillions to the value of global equities and lifted the dollar to a multiyear high.
US equities are trading near a record and crude oil has climbed to a 17-month peak as traders have endured shocks from the Brexit vote in the UK to the US presidential election.
“There are technical indicators flashing certain signs, but there aren’t any events left this year, and I see 2016 ending with little disturbance, and small moves,” said Seiji Iwama, a fund manager with Daiwa SB Investments Ltd in Tokyo.
Nations from Australia to the UK and US observed holidays on Monday, while markets in Dubai, Russia and percent Brazil are among those open.
China stocks rose in afternoon trading to erase earlier losses as investors bet on State-backed builders after the government announced a spending plan for public works that include 5,000 kilometers of new highway next year.
The Shanghai Composite Index rose 0.4 percent to 3,122.57 at the close, reversing a loss of as much as 1.3 percent. China Communications Construction Co surged 7.9 percent for its biggest gain since Nov 3. Other large Stateowned builders of housing, ships and nuclear plants also jumped. The Shenzhen Composite Index erased an earlier loss to add 0.4 percent.
China will spend 1.8 trillion yuan ($259 billion yuan) on highway and waterway projects next year, the Ministry of Transport said in a statement on its website. Shanghai’s benchmark index has gotten a boost in the last quarter of 2016 from China’s “old economy”, namely industrial, infrastructure and State-backed firms. A gauge of mainland industrial companies has risen 11 percent in the fourth quarter, outpacing the 3.9 percent gain by the Shanghai Composite Index.
“The 1.8 trillion yuan plan is huge, and the actual investments could be a bit more,” said He Minliang, a Taipeibased analyst at Capital Securities Corp.
the gain in the benchmark Shanghai Composite Index on Monday