Stocks move higher on hopes of China’s stimulus plan
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European and Asian stock markets started to move higher in September, after weak Chinese manufacturing data, which raised hopes that Beijing policymakers might take action to boost the growth of the world’s second largest economy.
The Stoxx 600 stock index across the region rose 0.8% after rising for the seventh consecutive month in August. The London FTSE 100 Index also rose 0.8%.
In Asia, Hong Kong’s Hang Seng Index rose 0.6%, Tokyo’s Topix Index rose 1%, and China’s CSI 300 Index rose 1.3%. The international energy benchmark Brent crude oil rose 0.5% to US$71.99 per barrel, and OPEC and its allies will meet later on Wednesday.
Previously, Caixin’s Manufacturing Purchasing Managers Index (an independent survey of Chinese factory activity) fell below the 50th level of monthly expansion and contraction for the first time since April 2020. Slow down In the last month’s industrial production and export growth, travel restrictions were used to control the spread of the Delta Coronavirus variant, regulatory suppression on the education and technology sectors, and Restrict bank loans Designed to cool the real estate boom.
Daiwa economist Chris Scicluna stated that the latest data “consolidates the view that [China’s] Policymakers will introduce more stimulus measures soon.”
Emmanuel Cau, head of European equity strategy at Barclays, said that European and American investors had previously considered the general slowdown of the Chinese economy, but a series of recent weak data is pushing “the disadvantage is a good way, and more policy easing is expected.”
In the debt market, the 10-year U.S. Treasury bond yield rose 0.02 percentage points to 1.326% before the release of the US job market data on Friday.
Analysts surveyed by Bloomberg expect Friday’s monthly non-farm payrolls report to show the U.S. economy 750,000 jobs added In August.The U.S. Central Bank has pledged to continue to purchase 120 billion U.S. dollars of U.S. Treasury bonds and mortgage-backed securities every month until substantial progress is made in achieving the goal of maximizing employment. Signaling It may withdraw currency support from this crisis period at the end of this year.
The U.S. dollar index, which measures the U.S. dollar against the currencies of other major economies, rose 0.1%. The euro was steady at $1.1803, while the British pound was also flat at $1.3754.
Although an investigation by the American Consultative Council showed that US consumer confidence hit a six-month low in August due to the surge in Delta cases and rising inflation, the futures market hinted that the US stock market would continue to rise on Wednesday.
After the Wall Street Standard & Poor’s 500 Index rose for the seventh consecutive month in August, contracts betting on the trend of the index rose 0.4%.
“this [equity] The market should take into account a temporary slowdown in economic activity, but [it] No,” said Sebastian Galy, senior macro strategist at Nordea Asset Management.
Barclay’s Cau stated that, on the contrary, the low yields of government bonds have been suppressed by the monetary stimulus measures of the Federal Reserve and the European Central Bank, which continue to fuel the “lack of alternative thinking” and make investors continue to buy stocks.