Global markets, euro push higher on ECB hopes
LONDON: World shares climbed to a near three-month high on Thursday as encouraging China data and a record high Wall Street kept traders upbeat ahead of an expected extension of the European Central Bank’s already generous stimulus programme.
Asia had shares hustled to one-month highs after Wall Street strode to another record and European stocks made it four gains on the bounce and the euro neared month highs as the prospect of ECB support loomed.
There is an outside chance the bank could signal an eventual scaling down of the aid, but most economists expect it to extend its 80 billion euro-a-month bond buying for at least another six months and add a few tweaks to keep it running smoothly.
Tokyo’s key stock index on Thursday chalked up its best close this year, tracking Wall Street’s surge to another fresh record high and as investors eye a key European Central Bank meeting.
The Nikkei 225 rose 1.45 per cent, or 268.78 points, to end at 18,765.47, while the broader Topix index of all first-section issues gained 1.48 per cent, or 22.07 points, to 1,512.69.
Shares in Hong Kong chalked up a third successive gain on Thursday, tracking a record close on Wall Street and following forecast-beating trade data out of China, while investors look ahead to a key European Central Bank meeting.
The Hang Seng Index climbed 0.27 per cent, or 60.92 points, to end at 22,861.84. But the benchmark Shanghai Composite Index slid 0.21 per cent, or 6.87 points, to 3,215.37 and the Shenzhen Composite Index, which tracks stocks on China’s second exchange, declined 0.62 per cent, or 12.96 points, to 2,077.37.
Bond markets had barely budged as traders retreated to the sidelines ahead of the ECB, which announces its decision at 11:45 GMT and holds a news conference at 12:30 GMT.
Risk appetite got an extra boost overnight when China reported upbeat trade figures with exports and imports both beating forecasts. Resource imports were very strong, a major reason prices for bulk commodities have been strong.
The resource-heavy and Chinasensitive Australian market jumped 1.2 per cent, as did MSCI’s broadest index of Asia-Pacific shares outside Japan.
An all time-peak for Samsung Electronics helped lift South Korea 2 per cent. Tokyo’s Nikkei put on 1.45 per cent as it brushed off a disappointing downward revision to Japan’s third quarter growth.
“The (China data) improvement reflects a strengthening in global demand, with recent business surveys suggesting that developed economies are on track to end the year on a strong note,” said Capital Economics’ Julian Evans-Pritchard.
The bullish mood around the ECB outweighed news that Moody’s had changed its outlook on Italy to negative, warning it may downgrade the credit rating if the country’s deteriorating economic and debt outlook was not reversed.
The euro took the move with aplomb, edging up to $1.0776 from an early trough of $1.0750. European bourses were up 0.2 to 0.5 per cent and Italian bank shares hit their highest since June after reports Rome would step in to rescue troubled bank Monte dei Paschi.
Markets have been surprisingly buoyant in the wake of Italy’s “No” vote last weekend on a constitutional reform referendum, in part on hopes for continued support from the ECB which may widen the type of bonds it buys.
Gold nudged higher and commodities including iron ore and coking coal held recent hefty gains as Chinese demand drove steel prices to their highest since April 2014.