World stocks push past growth worries in China, Italy

SINGAPORE — World markets rose on Monday, brushing off potential concerns about slower growth in China and a downgrade in Italy's credit rating over its plans to ramp up public spending.

KEEPING SCORE: Germany's DAX added 0.6 percent to 11,624 and France's CAC-40 was 0.4 percent higher at 5,102. Britain's FTSE 100 gained 0.7 percent to 7,096, while Italy's FTSE MIB was up 0.8 percent at 19,238.

On Wall Street, the future contracts for the Dow Jones Industrial Average and the Standard & Poor's 500 were both up 0.3 percent.

ASIA'S DAY: The Shanghai Composite index jumped 4.1 percent to 2,654.88 and the Hang Seng in Hong Kong surged 2.3 percent to 26,153.15. Japan's Nikkei 225 index reversed early losses, gaining 0.4 percent to 22,614.82 and the Kospi in South Korea added 0.3 percent to 2,161.71. Australia's S&P-ASX 200 countered the trend, shedding 0.6 percent to 5,904.90. Shares rose in Taiwan, Singapore and Indonesia but fell in Thailand.

CHINESE RALLY: Investors appeared to take heart from reassurances from Chinese officials over slowing economic growth. Gains might also have been driven by the expectation that weak GDP data could spur further stimulus. Song Seng Wun, an economist at CIMB Private Banking, noticed that state-linked funds were also buying into weakening markets. "Some investors are bargain hunting on the basis that there will be limited downsides," he added.

ITALY BUDGET: Italian lawmakers passed a draft budget that could raise the country's deficit to as much as 2.4 percent of gross domestic product. That's three times higher than promised by the previous government. In response, international credit rating agency Moody's downgraded Italy's ratings to Baa3, while keeping its outlook stable. The European Union has expressed concerned that the Italy's plans would worsen its debt and is expected to ask it to revise the budget. Italian bond yields have risen in recent weeks on concern about the country's finances, though they fell back somewhat on Monday as investors awaited the EU's response.

ANALYST'S TAKE: "The world appears to have bought time on the worst of headline and geopolitical risks, and that appears to be quelling the worst fears and helping to backstop markets," Vishnu Varathan of Mizuho Bank said in a commentary.

ENERGY: Benchmark U.S. crude rose 14 cents to $69.26 per barrel in electronic trading on the New York Mercantile Exchange. The contract added 0.7 percent to $69.12 a barrel in New York. Brent crude, used to price international oils, picked up 21 cents to $79.99 per barrel. In the previous session, it gained 0.6 percent to $79.78 a barrel.

CURRENCY: The dollar strengthened to 112.83 yen from 112.56 yen on Friday. The euro fell to $1.1499 from $1.1516.

Canada tests 'basic income' effect on poverty...

Nov 29, 2017

Canadian authorities are engaged in an unusual experiment in which a basic minimum income with no...

Toronto police release cause of death of...

Dec 18, 2017

Toronto homicide detectives have taken over the investigation into the deaths of billionaire Barry...

Canadian theater founder suspended amid...

Jan 4, 2018

A prominent figure in the Canadian arts world has been suspended by the theater company he...

Canada pipeline protesters erect structure near...

Mar 10, 2018

Anti-pipeline activists are erecting a cedar protest structure within distance of Kinder Morgan's...

Canada to buy major pipeline to ensure it gets...

May 29, 2018

Canada's federal government says it will buy an oil pipeline to the Pacific coast to ensure it gets...

Financial Markets

Market Sanctum is one of the world’s leading news sources for the currency trading community. Our analysts report on the latest changes in the current market, providing in-depth analysis.

Contact us: sales[at]marketsanctum.com