Frankfurt, London stocks reach record peaks
The Frankfurt and London stock markets touched record peaks yesterday, as investors eyed rallying oil prices, China’s vast infrastructure spending plans and upbeat German election news. In morning trade, the British capital’s benchmark FTSE 100 index hit an all-time peak at 7,460.20 points.
World oil prices leapt after oil ministers from Saudi Arabia and Russia the world’s two biggest oil producing nations declared Sunday that they would consider extending an output cut into 2018. That handed a boost to London’s sizeable energy sector, whose revenues and profits are boosted by rising crude futures. Frankfurt’s DAX 30 was catapulted to a new pinnacle at 12,832.29 points, partly on relief over Chancellor Angela Merkel strong win in a regional vote in Germany’s biggest state. The DAX later lapsed into negative territory.
Merkel’s Christian Democratic Union (CDU) party secured a strong win on Sunday in a regional vote in North Rhine-Westphalia, four months before national elections. “There does not seem to be any common driver to explain the highs hit by the German and UK indices, but rather a coincidental lining up of stars,” Spreadex analyst Connor Campbell told AFP.
“The DAX was fuelled by the CDU taking a tough seat in a regional election, while the FTSE it appears to be the commodity gains thanks to the Brent crude rise/Chinese infrastructure spending.”
China investment
China hosted Sunday an international summit showcasing its Silk Road infrastructure project that it hopes will revive ancient trading routes and breathe life into the world’s number two economy, which grew last year at its slowest pace in a quarter of a century. Chinese President Xi Jinping pledged to pump an extra $124 billion (114 billion euros) into the China-bankrolled project, which involves a huge network of ports, railways, roads and industrial parks.
Most Asian markets rose yesterday, with Hong Kong achieving a sixth successive gain. Hong Kong closed up 0.9 percent at levels not seen since mid-2015, while Shanghai edged up 0.2 percent-a third straight win. Seoul added 0.2 percent as investors ignored another missile test by North Korea. However Tokyo ended 0.1 percent lower on the back of a stronger yen, which hurts Japanese exporters. Back in China, official data showed output from the country’s factories and workshops slowed more sharply than expected in April, while retail sales were below par.
Tokyo stocks edged lower yesterday following North Korea’s latest missile launch and disappointing data, but small-car maker Suzuki shook off the gloom as upbeat earnings pushed it to a record close.
Pyongyang said it carried out a successful test of a new type of “ballistic rocket” on Sunday that experts said had an unprecedented range and brought US bases in the Pacific within reach, raising fresh geopolitical fears. Japanese shares were also hit after US retail sales and inflation data Friday fell short of expectations.
Data Monday also showed retail sales in China were weak, while output from the country’s factories and workshops slowed more sharply than expected in April. —AFP