Europe stocks rise as weak cur­rency bol­sters ex­ports

The China Post - - MARKETS -

Euro­pean stock mar­kets rose on Fri­day, ex­tend­ing the pre­vi­ous day’s gains as a weaker sin­gle cur­rency boosts com­pa­nies’ ex­ports from the eu­ro­zone.

Lon­don’s bench­mark FTSE 100 in­dex climbed 0.40 per­cent to trade at 7,043.60 points in late morn­ing deals.

In the eu­ro­zone, Frank­furt’s DAX 30 jumped 1.03 per­cent to 12,292 points and the CAC-40 in Paris ad­vanced 0.34 per­cent to 5,226.60 points.

The dollar has fought back against the euro in re­cent weeks as mar­kets bet on rises to U.S. in­ter­est rates later this year de­spite a clouded out­look.

Min­utes of the U. S. cen­tral bank’s last pol­icy meet­ing showed a split over when in­ter­est rates should again start ris­ing in the world’s big­gest econ­omy.

While last week’s U.S. jobs data “was a big dis­ap­point­ment, the min­utes from the Fed’s last meet­ing sug­gests that they re­main in hik­ing mode and may hike rates at some point this year, even if June now seems like a long shot”, said Forex. com an­a­lyst Kath­leen Brooks.

This week has mean­while seen also im­proved op­ti­mism over Greece af­ter the em­bat­tled eu­ro­zone na­tion made a sched­uled 459 mil­lion euro (US$495 mil­lion) loan pay­ment to the IMF on Thurs­day.

Mar­kets were look­ing ahead to next week’s meet­ings of the In­ter­na­tional Mon­e­tary Fund and World Bank for up­dated fore­casts on the global econ­omy.

“In pre­vi­ous years, the IMF has tended to be over-op­ti­mistic about the global eco­nomic re­cov­ery and has been com­pelled to re­vise down its global GDP fore­casts,” said Neil MacKin­non, econ­o­mist at fi­nan­cial group VTB Cap­i­tal.

“Large parts of the global econ­omy such as the eu­ro­zone and Ja­pan still face sub­dued lev­els of do­mes­tic de­mand while China, once grow­ing at a dou­ble-digit rate, is now slow­ing down,” he added in a note to clients on Fri­day.

Asia Shares Mostly Higher

Hong Kong stocks con­tin­ued their surge Fri­day, ral­ly­ing for a third straight ses­sion as main­land in­vestors flooded into the mar­ket, while Tokyo dipped af­ter breaching the 20,000 point mark for the first time in 15 years.

Tokyo’s Nikkei dipped 0.15 per­cent af­ter ear­lier break­ing 20,000 — a level not seen since April 2000. The in­dex fin­ished 30.09 down at 19,907.63

Hong Kong added 1.22 per­cent, or 328.00 points, to 27,272.39. The in­dex climbed more than eight per­cent over the past three days.

Shang­hai, which has al­most dou­bled over the past year on hopes for fresh stim­u­lus, ral­lied 1.94 per­cent, or 76.78 points, to end at 4,034.31, its best close since March 2008.

Syd­ney added 0.61 per­cent, or 36.15 points, to 5,968.37 and Seoul surged 1.40 per­cent, or 28.89 points, to 2,087.76.

Hong Kong’s Hang Seng In­dex has rock­eted since re­open­ing Wed­nes­day af­ter the long hol­i­day week­end, with traders in the main­land mak­ing the most of a link-up be­tween the in­dex and Shang­hai’s ex­change.

Turnover hit record highs on each of the past two days as in­vestors north of the bor­der sought out rel­a­tively cheap stocks af­ter a surge in Shang­hai that has been fu­elled by hopes for stim­u­lus to the world’s num­ber two econ­omy.

But an­a­lysts have warned of a snap-back.

“This phe­nom­e­non of a large amount of money push­ing into a space in the mar­ket in such a short pe­riod of time is ex­ag­ger­at­ing

points moves,” Tim Schroed­ers, a port­fo­lio manager at Pen­gana Cap­i­tal in Mel­bourne, told Bloomberg News.

“It looks highly spec­u­la­tive and prone to a cor­rec­tion at some stage. There seems to be a lot of spec­u­la­tion fu­elling fund flows in terms of pol­icy stim­u­lus from China which may or may not hap­pen.”

On Wall Street the three main in­dexes ended higher af­ter the La­bor Depart­ment said the num­ber of first-time un­em­ploy­ment claims filed in the past four weeks fell to a nearly 15-year low.

The Dow rose 0.31 per­cent, the S&P 500 gained 0.45 per­cent and the Nas­daq ad­vanced 0.48 per­cent.

Gold fetched US$ 1,202.92 against US$1,199.20 late Thurs­day. In other mar­kets: — Welling­ton was flat, nudg­ing up 0.19 points to 5,847.35.

— Manila added 0.93 per­cent, or 74.79 points, to 8,127.48.

— Sin­ga­pore rose 0.35 per­cent, or 12.08 points, to close at 3,472.38.

— Jakarta ended down 0.17 per­cent, or 9.56 points, at 5,491.34.

— Bangkok added 0.18 per­cent, or 2.72 points, to close at 1,547.83.

— Kuala Lumpur lost 0.27 per­cent, or 5.08 points, to 1,844.31.

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