Europe stocks higher, shrug off losses in markets in Asia
European markets opened higher Monday as investors shrugged off concerns about mainland China’s slowing economy that battered Asian stocks earlier in the day.
Most European markets gained in early trading. Germany’s DAX was up 1 percent to 11,810.19 and France’s CAC-40 added 0.3 percent to 5,159.70. The UK’s FTSE 100 gained 0.6 percent to 7,036.12. Futures augured a strong start to the week for Wall Street. Dow futures were up 0.6 percent at 17,867. S&P 500 futures were 0.5 percent higher at 2,086.60.
Asian markets mostly retreated, while Shanghai and Hong Kong tumbled after mainland Chinese authorities unveiled restrictions on dealers borrowing cash to trade shares.
The mainland clampdown, announced Friday, offset news at the weekend that the PRC’s central bank had reduced the amount of cash which banks must keep in reserve — a bid to boost loan activity.
Shanghai sank 1.64 percent, or 70.22 points, to 4,217.08 and Hong Kong fell 2.02 percent, or 558.19 points, to 27,094.93. Sydney shed 0.76 percent, or 44.8 points, to close at 5,833.1.
Tokyo stocks ended marginally lower. The benchmark Nikkei 225 at the Tokyo Stock Exchange slipped 18.39 points to 19,634.49, while the broader Topix index of all firstsection shares fell 0.38 percent, or 6.01 points, to 1,582.68.
In Tokyo share trading, mobile carrier SoftBank was down 1.05 percent at 7,583.0 yen, Toyota fell 0.42 percent to 8,262.0 yen and Fast Retailing, which operates the Uniqlo clothing chain, rose 0.65 percent to 48,075.0 yen.
ANA Holdings, which operates All Nippon Airways, edged up 0.05 percent to 333.9 yen following a report that the carrier will invest 3.5 billion yen in bankrupt Skymark Airlines to keep Japan’s third-biggest carrier afloat.
Seoul closed 0.15 percent higher, adding 3.21 points to 2,146.71.
The mainland’s People’s Bank of China Sunday announced it would cut one percentage point off the reserve ratio requirement, the second reduction this year and the latest monetary easing measure aimed at kickstarting growth in the world’s number-two economy.
It has also cut interest rates twice since November.
However, on Friday the China Securities Regulatory Commission announced tighter rules on margin trading — where investors buy shares mostly with borrowed money — which has helped propel the recent rally.
At the same time authorities made it easier to short-sell, or bet against stocks.
The Hong Kong and Shanghai share markets have been soaring as investors speculate that Chinese mainland authorities will continue to loosen monetary policy to counter a sharp slowdown.
“Investors are taking profits in China,” said Jonathan Ravelas, chief market strategist at Manila-based BDO Unibank.
“The clampdown initiated by securities regulators is adding to the sell-off and the weak investor sentiment is spreading to other markets in the region,” he told Bloomberg News.
Shanghai has more than doubled over the past year, while Hong Kong has surged about 18 percent this year.
Gold fetched US$1,200.30 against US$1,205.91 late Friday. In other markets: — Mumbai fell 1.95 percent, or 555.89 points, to end at 27,886.21.
Reliance Industries fell 4.46 percent to 885.55 rupees, while Sun Pharamceutical Industries rose 0.66 percent to 1,044.10 rupees.
— Jakarta closed down 0.18 percent, or 9.84 points, to 5,400.80.
Palm oil producer Astra Agro Lestari fell 1.19 percent to 22,825 rupiah, while lender Bank Negara Indonesia rose 1.77 percent to 7,175 rupiah.
— Bangkok closed down 0.42 percent, or 6.53 points, at 1,560.32.
— Oil company PTT fell 2.49 percent to 352.00 baht, while Siam Commercial Bank dropped 2.57 percent to 170.50 baht.
— Malaysia’s main index gained 0.15 percent, or 2.80 points, to close at 1,848.66.
Telekom Malaysia added 0.68 percent to 7.40 ringgit, Tenaga rose 0.55 percent to 14.52 while Maybank eased 0.11 percent to 9.48 ringgit.
— Singapore fell 0.62 percent, or 21.94 points, to close at 3,503.25.
Singapore Airlines rose 0.50 percent to SG$12.00, while Singapore Telecom fell 1.12 percent to SG$4.41.
— Wellington fell 0.63 percent, or 37.21 points, to 5,824.28.
Air New Zealand was down 0.72 percent at NZ$2.76 and Chorus was off 0.33 percent at NZ$3.02.
— Manila slipped 1.03 percent, or 81.62 points, to 7,865.27.