While you were sleeping: European stocks advance
Feb 18 (BusinessDesk) – European stocks climbed as Chinese credit data provided reason for optimism about the outlook
for the world’s second-largest economy.
Commodities including silver and copper also gained, as the US dollar weakened amid expectations the Federal Reserve
won’t need to raise interest rates any time soon with data that have recently surprised more on the downside, than the
upside.
China’s new credit climbed to a record in January, with aggregate financing rising to 2.58 trillion yuan (US$425
billion) last month, according to the People’s Bank of China.
“The better-than-expected credit data out of China gives the markets some support,” Benno Galliker, a trader at Luzerner
Kantonalbank in Lucerne, Switzerland, told Bloomberg News. “There are fears that the measures taken by China are hitting
the breaks too hard and that the economy won’t grow as fast anymore. Today’s numbers speak a different language.”
In Europe, the Stoxx 600 Index finished the session with a 0.4 percent gain from the previous close. France’s CAC 40
slipped 0.1 percent, while Germany’s DAX inched lower as well.
The UK’s FTSE 100 climbed 1.1 percent amid further signs the country’s economic recovery is gathering steam. Shares of
Hammerson rose, closing 3.1 percent higher, after the company posted earnings that pleased investors and bolstered
confidence about the outlook for UK corporate profits.
"When you look at property, it's always a great barometer for confidence," Mike McCudden, head of derivatives at
Interactive Investor, told Reuters. “When you see the likes of [Hammerson] coming out with good numbers it perks up the
whole market.”
Copper rose, advancing 0.6 percent on the London Metal Exchange, as did silver and gold.
Some believe gold will likely continue its recent climb, beginning its recovery from last year’s slump and rising to the
highest level in three months today.
“It is the insurance product against further emerging market turmoil, more bad US data, potentially too frothy equity
markets and unforeseen market shocks,” UBS analysts wrote in a report, according to Bloomberg News. “With positioning so
light and the sentiment turn in gold’s favour so recent, we expect that gold will remain bid.”
US markets were closed on Monday for the Presidents’ Day holiday.
On Wednesday, minutes of the January FOMC meeting will be released, and investors will comb them for further clues about
outlook for the Fed’s plans to taper its bond-buying program, now at US$65 million a month.
Later today the Bank of Japan will conclude a regularly scheduled two-day policy meeting. The focus will be on Governor
Haruhiko Kuroda’s comments on the outlook for the nation’s economy.
(BusinessDesk)