Global equity markets rose on Tuesday, led by gains in China after Beijing announced fresh stimulus measures to support the world’s second-largest economy.
The trade hopes seriously supported the main stock indexes around the world. This Sunday, President Donald Trump has announced that the proposed duties on imports of Mexican goods are cancelled. The head of state has published on Twitter that he has “full confidence” that Mexico will deal with migration from Central America after the neighbouring countries have reached an agreement.
Meanwhile, investors closely follow developments in the US-China trade war. Earlier today, Trump commented that he believes China will make a deal with Washington, because “it will have to do so”.
Beyond trade tensions between the U.S., China and Mexico, investors have been watching closely for new signalling from central banks across the globe this week.
With the Federal Reserve set to meet next week, investors were looking for any information that could provide clues as to whether rate cuts lie ahead for the world’s largest economy.
Asian markets recap
The main indexes of the Asia-Pacific stock exchanges ended the second session of the week into the green despite the threat of additional US duties on Chinese imports.
In China, the mainland index Shanghai Composite added 2.58% to its value, ending the day at 2,925.72 points. The Hong Kong benchmark Hang Seng advanced by 209.55 points, or 0.76%, to 27,788.19 points.
In Japan, the blue-chip index on Tokyo Stock Exchange, Nikkei 225, rose by 69.86 points, or 0.33% to 21,204.28 points. Japan’s economic data for the first quarter of 2019 came out on Monday. The country’s economy grew at an annual rate of 2.2% in the January-March period, marking a second consecutive quarter of growth despite weak consumer spending. Capital expenditures rose by 0.3% on a quarterly basis, reversing the original contraction data by 0.3% after growth by 2.7% in the October-December period. Private consumption, which contributes to about 60% of economic growth, declined by 0.1%, remaining unchanged from the provisional figures. In the previous quarter, the indicator rose by 0.8%. For its part, the Central Bank Governor, Haruhiko Kuroda, told that the bank regulator could provide additional financial incentives if necessary but should also pay attention to the side effects on the financial system. He stressed that it is not necessary at this time for the Bank of Japan to act on this issue, as the economy of Japan is stable.
The South Korean index Kospi rose by 0.59% to 2,111.81 points.
In Australia, the local index S&P ASX 200 grew by 102.40 points, or 1.59%, to 6,546.30 points. Business confidence in the country rose in May, while the business conditions index declined. The business confidence index rose by 7 points in May compared to 0 points in the previous month. This is the biggest gain since the centre-right government came to power nearly six years ago, according to a survey by the National Australia Bank. The Business Conditions Index, tracking new employees, sales, and earnings, however, fell to 1 point from 3 points reported a month earlier. The governor of Reserve Bank of Australia, Philip Lowe, cut the benchmark interest rate last week for the first time since taking office in 2016 to encourage businesses to open new jobs and invest in the economy. Better data on business climate was apparently backed by Prime Minister Scott Morrison’s victory on May 18th, while the company survey was conducted between May 14-24.
European markets mid-session recap
Stock markets across the Continent are rising sharply with hopes for further economic stimulus in China helping to offset the chilling effect from the ongoing US-China trade stand-off.
Against that backdrop, as of 14:00 GMT the benchmark Stoxx 600 was ahead by 0.81% to 381.35 points, alongside a jump of 1.05% for the German DAX 30 to 12,171.59 points, while the French CAC 40 is up by 0.56% to 5,412.51 points and British FTSE 100 jumped by 0.3% to 7,398.45 points.
Shares in Auto & Parts companies were doing especially well, with the Stoxx 600 sector gauge adding 1.87% to 479.89 points, while that for firms in the Basic Resources was up by 1.0%.
The shares of carmakers are up by more than 1% with Renault adding 1.16%, Volkswagen and Daimler appreciating by 1.37% and 1.75%, respectively.
In another boost to sentiment, in remarks made to journalists earlier in the session, European Central Bank governing council member, Olli Rehn, said all options were on the table should further monetary stimulus be needed, including further changes to its so-called ‘forward guidance’ or tiered interest rates.
Novo Nordisk shares were on the front foot, gaining on the back of poor test results for one of competitor Eli Lilly’s diabetes drugs.
Wall Street early-trading recap
The main indexes of the New York Stock Exchange started today’s session into the green, with investors still feeling optimistic about the US-Mexico deal late last week.
The blue-chip index Dow Jones Industrial Average, which tracks stock trading of the 30 largest US public companies, added 120.87 points, or 0.46%, to its value, reaching a level of 26,183.55 points. The broader S&P 500 progresses 0.62% to 2,904.77 points, while the Nasdaq Composite edged higher by 64.87 points, or 0.83%, to 7,888.04 points.
Shares of technology companies Alphabet, Apple and Facebook rose by 1.36%, 1.01% and 2.27%, respectively, while the shares of Microsoft and Amazon added 0.57% and 1.17%, respectively.
Among the financial companies, the shares of JPMorgan Chase, Bank of America and Citigroup rose 0.98%, 2.21% and 1.12%, respectively.
Earlier today, the Financial Times reported that Amazon has been selected as the world’s highest rated brand.