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Stock indexes rally on Friday amid positive macro news

Stock indexes rally on Friday after a gauge of Chinese manufacturing hit a three-month high.

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Stock indexes rally on Friday after a gauge of Chinese manufacturing hit a three-month high, helping to ease investor concerns over the global economy.

The markets’ sentiment was also bolstered after White House economic advisor Larry Kudlow said the US and China are making “fantastic” progress in their trade negotiations and are to mark a “remarkable, historic deal”. On the other hand, US Secretary of the Treasury Steven Mnuchin said that “significant progress has been made”, but added that there is work ahead of an agreement.

Investors shrugged off a downbeat survey showing that Eurozone manufacturing activity went into reverse for the first time in over five years last month. However, German retail sales grew at a stronger-than-expected pace in January, entirely reversing a steep decline in the previous month. The retail sales rose by 3.3% month-on-month, which was much faster than the 1.90% gain economists had predicted. The latest sales growth was the biggest since October 2016, when sales rose at the same pace.

Asian markets recap

Most of the main stock indexes in the Asia-Pacific region ended today’s trading session into the green, despite China’s industrial activity slowdown, which hit a three-year low in February.

Chinese index Shanghai Composite added 53 points, or 1.80%, ending the day at 2,994 points. Hong Kong’s index Hang Seng rose by 166.12 points to 28,799.30 points. China’s industrial activity slowed down to a three-year low in February, as export orders declined at the fastest rate since the global financial crisis, highlighting the deepening cracks in the economy, which is struggling with weak demand on the domestic and foreign markets.

Shanghai composite

PMI in the industrial sector fell to 49.2 points in February from 49.5 points reported in January. The slowdown in activity in the sector is taking place for the third month in a row, according to data from the National Bureau of Statistics. Overall, manufacturing activity in China has been weakening since May last year.

On the Tokyo Stock Exchange, the index Nikkei 225 rose by 217.53 points, or 1.02%, to 21,602.69 points, and shares of the SoftBank Group advanced by 1.41%. On Thursday, the Financial Times reported that Japan’s industrial output had declined for the year, while retail sales in the country missed the forecasts. Meanwhile, the ndustrial production in Japan shrank by 3.7% yoy in January.

South Korean index Kospi ended with a decline of 1.76% to 2,195.44 points against the background of the failed meeting between US President Donald Trump and North Korean leader Kim Jong-Un.

In Australia, the index S&P ASX 200 rose by 0.38% to 6,192.70 points, while shares of Westpac and Commonwealth Bank of Australia appreciated by 0.19% and 0.54%, respectively.

European markets mid-session recap

German index DAX 30 is trading with an increase of 0.98% to 11,627.22 points at 11:05 GMT. Automakers led the surge, with BMW, Daimler, and Volkswagen rising between 0.7% and 1.3%. Rheinmetall soared 7.4% after its operating earnings or EBIT before special items for fiscal 2018 rose by 23% from last year.

French benchmark CAC 40 is up by 30 points, or 0.58%, at 5,271.07 points at mid-session on Friday. Automakers Renault and Peugeot were up 1-2% as the dollar firmed up after the release of better-than-expected US GDP data for the fourth quarter. Banks BNP Paribas, Credit Agricole, and Societe Generale were modestly higher.

CAC 40

British blue-chip index FTSE 100 was up by 34 points, or 0.48%, to 7,108.88 points at 11:05 GMT. The shares of the advertising agency WPP jumped by 8% after posting a smaller-than-expected fall in 2018 revenues and vowed to deepen the group’s restructuring plans. Hedge fund manager Man Group slumped 4% after its assets under management slipped 0.5% in the year ended December 31. Property website Rightmove lost 5% after its full-year profit growth slowed.

Wall Street markets pre-session recap

Wall Street stock index futures were higher Friday morning after official data showed stronger-than-anticipated economic growth in the world’s largest economy.

At around 06:30 a.m. ET, Dow futures are up by 173 points, indicating a positive open of more than 170 points. Futures on the S&P 500 and Nasdaq Composite were both seen higher by 16.75 points and 51.25 points, respectively.

Market participants are likely to closely monitor the economic data on Friday. Personal income, consumer spending and core PCE figures for December and January will be released at around 8:30 a.m. ET. Manufacturing PMI, ISM manufacturing, and consumer sentiment data are all expected to follow later in the session.