Chi­nese data spurs mar­kets

Euro­pean, emerg­ing mar­ket stocks show big gains

The Star Early Edition - - INTERNATIONAL - Marc Jones

STRONG data from China kept world shares near a record high yes­ter­day, sent cop­per to a 4½ month peak and left emerg­ing mar­ket stocks buy­ers cheer­ing a near 5 per­cent gain in the last five days.

Fig­ures from Bei­jing showed China’s econ­omy grew at a faster-than-fore­cast 6.9 per­cent year-on-year in the sec­ond quar­ter, thanks to a pick-up in in­dus­trial out­put and do­mes­tic con­sump­tion and as in­vest­ment re­mained strong.

Asia shares had hit a 2-year high overnight and Europe’s bourses rose early on as they looked to score their fourth ses­sion of un­bro­ken gains.

The jump in cop­per and other in­dus­trial me­tals, as well as higher oil prices fol­low­ing the Chi­nese data, meant min­ing firms led the charge, though all sec­tors shuf­fled higher.

“The China data was very help­ful,” said fund man­ager UBP’s macro and FX strate­gist Koon Chow.

“I think it had a par­tic­u­lar res­o­nance af­ter Fri­day’s (weaker than ex­pected) US CPI and re­tail sales data… so it is ex­tend­ing the Goldilocks en­vi­ron­ment,” he said re­fer­ring to a not-too-hot, not-too-cold mar­ket cli­mate.

That lack­lus­tre US data meant the dol­lar was strug­gling to rise above a 10-month low in early Euro­pean trad­ing hav­ing watched com­mod­ity-based – and there­fore China-linked – Aus­tralian and Cana­dian dol­lars jet higher overnight.

The Aussie dol­lar hit its high­est level in more than two years be­fore it pulled back to $0.7813, while the Cana­dian dol­lar touched a one-year high be­fore it set­tled at around C$1.2659.

Britain’s ster­ling and the euro both eased against the dol­lar, hav­ing jumped on Fri­day as of­fi­cials from both sides pre­pared for Brexit talks in Brus­sels. The euro was worth 87.52 pence.

UK Brexit Sec­re­tary David Davis, in the Bel­gian cap­i­tal for talks with the EU’s chief ne­go­tia­tor Michel Barnier a month af­ter a first meet­ing, said yes­ter­day that hav­ing “made a good start” dur­ing their last en­counter, “this week we’ll be get­ting into the real sub­stance”.

Work­ing groups will fo­cus on three ar­eas: cit­i­zens’ rights; the EU de­mand that Britain pays some €60 bil­lion (R896bn) to cover on­go­ing EU bud­get com­mit­ments; and other loose ends, such as what hap­pens to Bri­tish goods in EU shops on Brexit day.

“It seems that the Bri­tish govern­ment wants to (take) ma­jor steps to­wards the EU in the up­com­ing round of ne­go­ti­a­tions,” wrote Com­merzbank an­a­lysts.

PHOTO: REUTERS

An in­vestor is re­flected in a win­dow dis­play­ing a board show­ing stock prices at the Aus­tralian Se­cu­ri­ties Ex­change in Syd­ney, Aus­tralia, yes­ter­day, as the Aus­tralian dol­lar hit its high­est level in more than two years.

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