Asia shares recoup losses as China shares hit 7 months high

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SYDNEY : Asian shares set up camp at one-year peaks on Monday as a rally in Chinese stocks helped offset news that Japan’s economic growth had ground to a halt last quarter, while oil prices extended their latest rally.

China’s blue-chip CSI300 Index rose 1.3 percent to a seven-month high and Shanghai added 0.9 percent amid talk more stimulus would be forthcoming from Beijing.

European bourses were seen starting slightly firmer, while the E-mini futures for the S&P 500 ticked up 0.1 percent.

MSCI’s broadest index of Asia-Pacific shares outside Japan recouped early losses to stand steady. It has climbed almost 14 percent since late June when Britain’s vote to leave the European Union unleashed a new wave of global policy stimulus, led by aggressive action from the Bank of England.

All this easing has pushed rich-world bond yields dramatically lower and driven investors to seek higher returns in longer-term debt and in emerging markets.

Yields on British 10-year gilts have more than halved to all-time lows of 53 basis points, having been up at 1.39 percent just before the Brexit vote.

That has pulled down rates right across Europe, with Spanish yields for instance, falling over 60 basis points to break under 1 percent for the first time ever.

The plunge in returns on bonds has made equities look more attractive in comparison. The Dow S&P 500 and Nasdaq all made record closing highs last week for the first time since 1999.

High on the U.S. calendar this week are inflation figures for July ECONUS and minutes of the last Federal Reserve meeting which might offer more clues on the chance of a rate hike by year end. There are also five separate Fed speakers on the docket this week.

Source : Reuters

 

 

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