Europe stocks rise as weak currency bolsters exports
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.