Asian stocks up, Europe falls af­ter global stock rally fades

The China Post - - MARKETS -

World stock mar­kets were un­even on Fri­day as a global rally driven by up­beat U.S. eco­nomic data faded.

Euro­pean stocks fell in early trad­ing, with France’s CAC-40 down 0.5 per­cent at 4,636.26 and Ger­many’s DAX 0.9 per­cent lower at 10,219.43. Bri­tain’s FTSE 100 slipped 0.1 per­cent to 6,1845.64.

U.S. stocks were poised to open lower, with Dow fu­tures down 1 per­cent to 16,493.00 while S&P 500 fu­tures re­treated 0.9 per­cent to 1,970.60.

The declines came a day af­ter strong gains fol­low­ing a re­port that U.S. sec­ond-quar­ter eco­nomic growth was much stronger than ini­tially es­ti­mated.

Global stock mar­kets are set­tling down af­ter the tu­mult of the past two weeks, which saw Chi­nese stocks plunge, wip­ing out gains for the year, on jit­ters over the econ­omy and a sur­prise de­val­u­a­tion of the yuan. An­a­lysts warn there may be fur­ther volatil­ity ahead.

“Un­cer­tain­ties re­gard­ing China and the emerg­ing world are likely to linger and un­cer­tainty still re­mains around the Fed,” said Shane Oliver, head of in­vest­ment strat­egy at AMP Cap­i­tal.

How­ever, he added that he be­lieves mar­kets have bot­tomed out and a “cycli­cal bull mar­ket” is likely to re­sume. “De­spite the re­cent set back, share mar­kets are likely to re­main in a broad ris­ing trend,” he said.

The re­cent mar­ket tur­moil has thrown into doubt ex­pec­ta­tions for a U.S. Fed­eral Re­serve in­ter­est rate hike in Septem­ber, with most econ­o­mists now say­ing it’s off the ta­ble for now. Fed of­fi­cials hold their an­nual meet­ing at Jack­son Hole, Wy­oming, this week­end, which will be heav­ily scru­ti­nized for clues on the rate hike tim­ing.

Most Asian bench­marks ended strongly as the U.S. growth data, which also helped oil prices stage an im­pres­sive re­bound, gave added en­cour­age­ment to in­vestors seek­ing bar­gains in beaten-down shares.

The Shang­hai Com­pos­ite In­dex in main­land China rose 4.8 per­cent to close at 3,232.35, adding to its 5.3 per­cent gain Thurs­day, which was its first in­crease in six days dur­ing which it shed nearly 23 per­cent. Most of Shang­hai’s gains came in the last hour of trad­ing, a cu­ri­ous pat­tern re­peated from Thurs­day that led some to be­lieve that Bei­jing was again in­ter­ven­ing in the mar­ket to prop up prices.

“It’s just the state-owned funds that jumped in. I don’t know which ones, but def­i­nitely from the state,” said Dickie Wong, ex­ec­u­tive di­rec­tor at Kingston Fi­nan­cial Group.

Ja­pan’s bench­mark Nikkei 225 in­dex climbed 3 per­cent to close at 19,136.32 af­ter lack­lus­ter monthly data on in­fla­tion and house­hold spend­ing raised hopes of fur­ther stim­u­lus.

South Korea’s Kospi rose 1.6 per­cent to 1,937.16 while Hong Kong’s Hang Seng swung into a loss in the fi­nal hour of trad­ing, los­ing 1 per­cent to 21,612.39. Aus­tralia’s S&P/ASX 200 gained 0.6 per­cent to 5,263.60. Welling­ton closed up 0.63 per­cent, or 35.53 points, at 5,670.48. Manila closed 1.09 per­cent, or 76.72 points, higher to 7,098.81.

Gold, which is seen as a safe haven in times of stock mar­ket tur­moil, traded at US$1,130.38, up from US$1,125.00.

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