Mainland China jumps on hopes of stimulus
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.