- Category: Economic
- Published Tuesday, February 16, 2016
- CTV News
HONG KONG - World stock markets were mostly higher Tuesday as a strengthening yuan and hopes for more central bank stimulus gave investors relief from the mauling that markets have suffered so far this year.
KEEPING SCORE: European stocks were higher in early trading. France's CAC 40 climbed 0.4 per cent to 4,131.18 and Britain's FTSE 100 added 0.2 per cent to 5,831.64. Germany's DAX dipped 0.3 per cent to 9,181.45. U.S. benchmarks were poised to open sharply higher after a long weekend. Dow futures rallied 1.5 per cent to 16,148.00 and broader S&P 500 futures jumped 1.5 per cent to 1,886.40.
STIMULUS HOPES: Investor sentiment remained positive that central banks would continue to ease monetary policy thanks to comments from the head of the European Central Bank. With the ECB set to discuss policy measures on March 10, Mario Draghi told the European Parliament on Monday that the bank has a range of instruments it can deploy if it decides more stimulus is needed. Earlier, a disappointing report on Japanese economic growth also raised hopes for more policy easing.
RENMINBI RELIEF: China's strengthening currency also helped boost sentiment. The yuan hovered near its strongest level so far this year a day after the central bank guided the currency, also known as the renminbi, sharply higher. Previous weakness in the yuan triggered worries the Chinese economy was in worse shape than thought. Meanwhile, new yuan loans jumped 71 per cent in January, the official Xinhua news agency reported Tuesday, suggesting solid demand in the world's No. 2 economy.
ANALYST'S TAKE: "Since the start of January everything went south and we really needed some positive news," said Jackson Wong, associate director at Huarong International Securities. "Factors that were affecting the markets negatively have turned positive now: the yen is weaker, the renminbi is stronger, global markets like the U.S. are stabilizing. All the negative catalysts from January are turning better."
ASIA'S DAY: Japan's Nikkei 225 added 0.2 per cent to close at 16,054.43 after soaring 7.2 per cent the day before, which was its biggest daily gain since September. South Korea's Kospi rose 1.4 per cent to 1,888.30 and Hong Kong's Hang Seng advanced 1.1 per cent to 19,122.08. The Shanghai Composite Index in mainland China surged 3.3 per cent to 2,836.57 and Australia's S&P/ASX 200 was up 1.4 per cent to 4,910.00. Benchmarks in Taiwan and most of Southeast Asia also rose.
ENERGY: Benchmark U.S. crude rose $1.28, or 4.4 per cent, to $30.72 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $3.23 to settle at $29.44 a barrel on Friday. Brent crude, a benchmark for international oils, added $1.38 to $34.77 a barrel in London.
CURRENCIES: The dollar eased to 114.06 yen from 114.54 yen in Monday's trading. The euro edged up to $1.1174 from $1.1168.