China sends global stocks on rally

Chinese exports surged in March, the first gain in nine months, new figures show
AFP

London (AFP) – Asian and European stocks churned higher Wednesday on strong Chinese trade data, building on the previous day’s solid gains driven by soaring oil prices, while US stocks rose on upbeat bank earnings.

“A sparkle returned to European trading on Tuesday with major indices buoyed by strong trade data from China and oil prices trading at fresh 2016 highs,” said CMC Markets analyst Jasper Lawler.

“The apparent turnaround in China’s economy, the rise in oil prices, as well as a more cautious Federal Reserve, have removed the major concerns that led to the beginning of the year sell-off.”

In afternoon deals, the resources-heavy London stock market won 1.6 percent, while Frankfurt rose 2.0 percent and Paris gained 2.7 percent in value.

Shanghai ended 1.4 percent higher on the data and Hong Kong soared 3.2 percent, while Tokyo spiked 2.8 percent higher.

The share prices of energy and mining firms jumped because China is a leading global consumer of many commodities.

In London, Miner Anglo American won 6.4 percent to 682.40 pence and peer BHP Billiton gained 6.6 percent to 862.30 pence.

Energy major Royal Dutch Shell meanwhile added about 1.6 percent and BP gained 2.6 percent, despite a modest pullback in oil prices on Wednesday.

On the downside, British supermarket Tesco shed 5.8 percent after warning that profits would take a hit from its large investment in price-cutting.

“Most sectors of the FTSE 100 were in the green, led by the China and commodity-sensitive mining sector,” added Lawler on Wednesday.

– Chinese New Year bump –

China said exports rocketed by 11.5 percent in March to $160.8 billion (142.3 billion euros) from a year earlier. That followed a 25-percent slump in February and marked a first gain in nine months, underlining optimism over the world’s second biggest economy.

The solid outcome beat market expectations for a 10-percent gain, according to economists polled by Bloomberg.

“The strong export growth had a lot to do with an easier comparison to last year due to the timing of Chinese New Year, yet this isn’t a market that looks too intent on poking holes in much of anything,” said Patrick O’Hare of Briefing.com.

At the same time, the energy sector continued to soar on reports that Saudi Arabia and Russia have agreed to freeze output ahead of a key producers’ meeting this weekend.

Higher crude prices tend to boost profits and revenues for oil firms.

Asian equities also burst higher on a wave of renewed economic confidence, which also saw the safe-haven yen retreat against the dollar having soared more than five percent since the start of the month.

Wall Street joined the rally, with the Dow climbing 0.7 percent at the opening of trading in New York on Thursday, as the top US bank beat expectations as the earnings season got underway in earnest.

US banking giant JP Morgan’s announced a better than expected net profit of $5.5 billion for the first quarter of 2016  despite taking a big hit from its exposure to the global commodities rout.

The bank, the largest in the United States by assets, said it also suffered from a tough climate for business lending and investment, but was helped out by the American consumer’s robust appetite for credit.

Analysts at Charles Schwab said “upbeat results from Dow member JPMorgan Chase & Co are supporting the financial sector…”

– Key figures around 1330 GMT –

London – FTSE 100: UP 1.6 percent at 6,339.99 points

Frankfurt – DAX 30: UP 2.0 percent at 9,953.96 

Paris – CAC 40: UP 2.7 percent at 4,4,463.99

EURO STOXX 50: UP 2.7 percent at 3,021.53

New York – Dow: UP 0.7 percent at 17,839.25

New York – S&P 500: UP 0.6 percent at 2,073.93

New York – Nasdaq: UP 0.7 percent at 4,905.77

Tokyo – Nikkei 225: UP 2.8 percent at 16,381.22 (close)

Shanghai – Composite: UP 1.4 percent at 3,066.64 (close)

Hong Kong – Hang Seng: UP 3.2 percent at 21,158.71 (close)

Euro/dollar: DOWN at $1.1313 from $1.1386 on Tuesday

Dollar/yen: UP at 109.07 yen from 108.57 yen

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