Global Stocks Jump to Start the Week
The Stoxx Europe 600 opened 0.7% higher, led by gains in its basic resources and banking sectors, with Deutsche Bank shares up 3%. The German DAX rose 0.9% and the U.K.’s FTSE 100 was up 0.8%.
Hong Kong stocks were among the best performers in Asia on Monday. The Hang Seng Index rose 2.2%, on pace for its best performance in two months, as there was some relief that the weekend’s large-scale protest didn’t end in violence.
Elsewhere in Asia, the Shanghai Composite rose 2.1%, while indexes in Japan and Korea rose less than 1% apiece.
Chinese shares stood out with a strong rally, buoyed by a fresh interest-rate reform by Beijing that is widely expected to result in easier monetary policy.
An official blueprint to develop Shenzhen into a global technology hub and experiment with more financial liberalizations there made the gains on the smaller southern exchange even sharper.
Leading the pack were Shenzhen-listed technology firms and brokerages that stand to benefit from a proposed reform of share-listing policy. ZTE Corp.’s stock rose 6.1%, while Citic Securities increased 6.6%.
“Brokers are rising sharply because the Shenzhen development plan indicates stronger determination by the government to further open up the financial sector and encourage innovation,” said Deng Wenyuan, a Suzhou-based analyst at Soochow Securities.
U.S. Treasury yields were up after a brief inversion of the 10-year and 2-year yields last week stoked fears of a recession. The 10-year yield on Monday rose to 1.580%, from 1.540% on Friday. Yields rise when prices fall.
Eurozone government bond yields were also up from last week, with the U.K. 10-year gilt yield at 0.466% and the German 10-year bund at minus 0.681%.
Bond markets this week will be focused on speculation around a major stimulus packaged from the European Central Bank and German fiscal stimulus, said Commerzbank’s rates strategist Rainer Guntermann. Germany plans to sell a new 30-year bund on Wednesday.
Eurozone consumer-price index data, which measures what people in countries using the euro paid for household goods and services, is due out Monday. The July CPI data will provide greater insight into inflation and changes in purchasing trends on the Continent as policy makers worry the global economy is slowing.
Chinese multinational technology company Baidu Inc. is slated to release its quarterly earnings as well.
In commodities, global benchmark Brent crude gained 1.1% to $59.28 a barrel. Gold dropped 0.5%.
Minutes from the Federal Reserve’s most recent meeting will be released on Wednesday, offering further clues on the central bank’s policy outlook. Leaders from central banks around the world will meet on Friday in Wyoming for the Fed’s annual policy symposium.
Source: Dow Jones