Main­land China jumps on hopes of stim­u­lus

The China Post - - BUSINESS INDEX & -

Chi­nese stocks jumped Mon­day as grim trade fig­ures raised ex­pec­ta­tions that Bei­jing would step up stim­u­lus mea­sures. Other global stock bench­marks were mostly lower.

Europe’s main stock mar­kets fell, as Turk­ish shares slumped on po­lit­i­cal un­cer­tainty in the coun­try fol­low­ing elec­tions, off­set­ting sup­port for the al­co­holic drinks and bank­ing sec­tors.

Mar­kets were also track­ing the lat­est de­vel­op­ments sur­round­ing Greece’s stand­off with the Euro­pean Union over its bailout re­pay­ments, as well as com­ments out of the Group of Seven sum­mit in Ger­many.

Frank­furt’s DAX 30 in­dex slid 0.67 per­cent to stand at 11,121.78 points in af­ter­noon deals and the CAC-40 in Paris shed 0.82 per­cent to 4,880.41.

The UK’s bench­mark FTSE 100 dipped 0.08 per­cent to 6,799.16 points com­pared with Fri­day’s close.

Else­where, the Turk­ish lira plunged to a record low point against the U.S. dollar Mon­day, while Turkey’s main stocks in­dex was down by about 6.0 per­cent.

Fu­tures au­gured a tepid start for Wall Street. S&P 500 fu­tures were down 0.1 per­cent. Dow fu­tures were un­changed. U.S. jobs fig­ures in­creased the chances of a U.S. in­ter­est rate rise be­fore the end of the year, which hit Wall Street and also over­shad­owed an up­ward re­vi­sion of Ja­panese eco­nomic growth.

The U.S. La­bor Depart­ment said Fri­day the world’s big­gest econ­omy and key driver of global growth cre­ated 280,000 jobs in May.

The fig­ure was far bet­ter than fore­cast and fol­lows a slow start to the year that saw a first-quar­ter eco­nomic con­trac­tion partly be­cause of se­vere win­ter weather.

The re­port also showed bet­ter wage growth, in an in­di­ca­tion of tight­en­ing in the jobs mar­ket.

While the news sug­gests the re­cov­ery is back on track, it also gives the Fed more ammunition to start rais­ing rates again, weigh­ing on U.S. eq­ui­ties.

Shang­hai stocks ended at a sev­enyear high af­ter an­other round of weak Chi­nese data fu­elled hopes for fresh stim­u­lus.

Shang­hai added 2.17 per­cent, or 108.78 points, to close at 5,131.88 — the high­est since Jan­uary 2008 — while Hong Kong rose 0.21 per­cent, or 56.12 points to fin­ish at 27,316.28.

Tokyo pared ear­lier losses to end marginally lower, dip­ping 3.71 points to 20,457.19, while Seoul closed 0.14 per­cent down, giv­ing up 2.91 points to 2,065.19.

Syd­ney was closed for a public hol­i­day.

Of­fi­cial data Mon­day showed Chi­nese im­ports slumped 17.6 per­cent in May, a sev­enth straight fall. Ex­ports dropped for the third suc­ces­sive month, slip­ping 2.5 per­cent.

The fig­ures are the lat­est to sug­gest the Asian eco­nomic gi­ant is strug­gling to get back up to speed af­ter growth was recorded at its slow­est since 1990 last year.

How­ever, traders took the data as an op­por­tu­nity to con­tinue buy­ing eq­ui­ties on ex­pec­ta­tions Bei­jing will add to its three rate cuts since Novem­ber as well as other eas­ing mea­sures.

“The econ­omy hasn’t yet bot­tomed out,” said Song Qi­uhong, an an­a­lyst at Shunde Ru­ral Com­mer­cial Bank Co. in Guang­dong prov­ince’s Foshan city. “The cen­tral bank has the in­cen­tive to keep rates low.”

Gold fetched US$1,173.88 com­pared with US$1,174.44 late Fri­day.

In other mar­kets:

— Welling­ton added 0.31 per­cent, or 17.91 points, to 5,885.81.

Air New Zealand was up 2.14 per­cent at NZ$2.86 and Fletcher Build­ing gained 0.71 per­cent to close at NZ$8.50.

— Manila closed 0.56 per­cent, or 41.81 points, lower at 7,484.89.

— Mumbai fell 0.92 per­cent, or 245.40 points, to 26,523.09 points.

Min­ing ma­jor Vedanta Limited fell 3.12 per­cent to 177.05 ru­pees, while Tata Power gained 1.13 per­cent to 71.40 ru­pees.

— Kuala Lumpur fell 5.88 points, or 0.34 per­cent, to 1,739.45.

MISC gained 1.35 per­cent to 8.25 ring­git, but Kuala Lumpur Ke­pong shed 3.38 per­cent to end at 21.74 ring­git.

— Bangkok edged up 0.06 per­cent, or 0.91 points, to 1,508.28.

— Oil com­pany PTT lost 0.58 per­cent to 344.00 baht, while Siam City Ce­ment added 0.25 per­cent to 400.00 baht.

— Sin­ga­pore fell 0.40 per­cent, or 13.34 points, to 3,320.33.

Sin­ga­pore Tele­com fell 0.97 per­cent to SG$4.10 while United Over­seas bank dipped 0.22 per­cent to SG$22.74.

— Jakarta ended down 1.68 per­cent, or 85.58 points, at 5,014.99.

Telecom­mu­ni­ca­tions firm PT Link Net Tbk gained 1.97 per­cent to 5,175 ru­piah, while palm plan­ta­tion com­pany PT Sawit Sum­ber­mas Sarana Tbk fell 4.80 per­cent to 1,985 ru­piah.

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