Global markets rise, led by Chinese surge on stimulus hope

People are reflected on an electric board as they watch financial markets indexes in Tokyo

Global markets turned higher yesterday after Chinese shares surged on hopes for new stimulus measures.
KEEPING SCORE: France’s CAC 40 was up 0.3 percent to 5,171.76 and Germany’s DAX rose by the same rate to 11,521.70. Britain’s FTSE 100, however, shed 0.8 percent to 6,668.13 as a drop in commodity prices weighed on its many mining stocks. U.S. shares were set to recover from recent losses, with both the S&P 500 and Dow futures up 0.2 percent.
CHINA TRADE: China’s trade figures shrank by unexpectedly wide margins in July, showing the world’s second-largest economy faces weak demand both at home and abroad. Exports contracted by 8.3 percent over a year earlier and imports were off by 8.1 percent. For the year to date, exports are off 14.6 percent and imports down by 0.8 percent. That increases pressure on Beijing to stimulate domestic growth and to avert politically sensitive job losses in export industries.
ASIA’S DAY: The Shanghai Composite Index jumped nearly 5 percent to 3,928.42. That continues a pattern of volatile trading since a sizzling rally peaked in early June. Japan’s benchmark Nikkei 225 was up 0.4 percent at 20,808.69 after flitting between gains and losses. Hong Kong’s Hang Seng was down 0.1 percent at 24,521.12. South Korea’s Kospi dropped 0.4 percent 2,003.17. Australia’s S&P/ASX 200 rose 0.6 percent to 5,509.20. Markets in Southeast Asia were mixed.
THE QUOTE: “Chinese equities are rallying today on the idea of further easing measures, while there is also talk the stability fund will likely get a nice top up of capital,” said IG chief strategist Chris Weston in a commentary. “Momentum seems to have swung back somewhat,” he said. “Although I wouldn’t personally be trading off this signal alone. Fiscal stimulus expectations are also helping.”
U.S. JOBS: The U.S. added 215,000 jobs in July, the Labor Department said Friday, another signal that the job market is steadily improving and providing a key piece of data for the Federal Reserve as it assesses whether the U.S. economy can withstand higher interest rates. The Fed has flagged that it will raise interest rates from record lows this year and a rate hike is expected in September or December.
ENERGY: Benchmark U.S. crude was up 5 cents to USD43.92 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 7 percent last week.
CURENCIES: The dollar rose to 124.75 yen from 124.22 yen on Friday. The euro dropped to $1.0936 from $1.0969. Yuri Kageyama, Business Writer, Tokyo, AP