Global Stocks Rally, but China Misses Out
October 16 2018 - 5:53AM
Dow Jones News
By David Hodari
Global stocks pared some of their recent losses Tuesday,
although persistent geopolitical fears and softening economic data
made for choppy trading in Asia.
The Stoxx Europe 600 was up 0.5% in early trading, while Japan's
Nikkei index climbed 1.3%, after a 1.9% fall on Monday.
Chinese stocks took a fresh hit, with the Shanghai Composite
down 0.9% and the Shenzhen A Share down 1.9% amid fresh fears about
growth. The country's consumer-price index hit a seven-month high
Tuesday, and Golden Week real estate and auto sales figures sharply
dropped from the same time last year.
Gains in European stocks were driven by a 1.3% increase for
Italy's FTSE MIB index. Italy's populist-led government is sticking
to a deficit target that will bring it into conflict with the
European Union, but reports on Tuesday said Prime Minister Giuseppe
Conte declared the country's membership of the EU as
"unrenounceable."
The yield on two-year Italian bonds fell to 1.34% from around
1.48% late Monday. Yields move inversely to prices.
In the U.S., futures pointed to 0.3% opening gains for the
S&P 500 and the Dow Jones Industrial Average, respectively.
U.S. stocks sold off late Monday, led by growth stocks such as
technology companies. The S&P 500 closed down 0.59% and has
been down for seven of the last eight trading days.
In recent weeks investors have been concerned over rising bond
yields, fractious global trade relations and global economic
growth.
While investors have for some months been aware of those issues,
a lack of fresh information in the run-up to earnings season has
exacerbated their effects, said Frances Hudson, a global strategist
in Edinburgh at Aberdeen Standard Investments.
"The U.S. is holding up reasonably well in terms of economic
data but you're not getting much information from companies getting
into earnings season. With a lack of information, you're left with
feelings to inform trading," Ms. Hudson said.
Investors will remain focused on the U.S. economy, with the
Treasury Department's semiannual currency report due out later
Tuesday. The report, and any accompanying statements by Treasury
Secretary Steven Mnuchin, will be parsed for any signs that the
U.S. deems China a currency manipulator.
The WSJ Dollar Index -- which measures the U.S. currency against
a basket of 16 others -- was last up 0.1%.
In commodities, Brent crude oil was down 0.6% at $80.33 a barrel
and gold was up 0.2% at $1,229.66 a troy ounce.
Write to David Hodari at David.Hodari@dowjones.com
(END) Dow Jones Newswires
October 16, 2018 05:38 ET (09:38 GMT)
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