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Asian Shares Shrug Off Losses

Asian Shares Shrug Off LossesAsian Shares Shrug Off Losses

Asian shares shrugged off early losses on Tuesday, as surging Chinese shares and Wall Street’s record close offset continuing worries over Greece’s fiscal woes.

Fears of a Greek bankruptcy persisted even as the country’s labor minister on Tuesday said Athens would soon conclude a cash-for-reform deal with its lenders, Reuters reported.

The cheer was expected to continue in Europe, where financial spreadbetters expected Britain’s FTSE 100 to open up by 12-13 points, or 0.2 percent higher. Germany’s DAX was seen opening up by 59 points, or 0.5 percent higher, while France’s CAC 40 was expected to open up by 18 points, or 0.4 percent higher.

“European equities are set to rally his morning off of the back of new highs in the Dow overnight,” Jonathan Sudaria, a dealer at Capital Spreads, said in a note.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.1 percent. The CSI300 index surged 3.4 percent and the Shanghai Composite Index rose 3.0 percent, as investors welcomed Beijing’s 2015 guidelines for economic reform that prioritize further opening of the country’s capital market and the restructuring of state enterprises.

“You need a vibrant stock market to push forward economic reforms, whether it’s about asset securitization or industry consolidation,” said Tian Weidong, analyst at Kaiyuan Securities in Xian. “With such a policy backdrop, investors are emboldened to stay in the market.”

Japan’s Nikkei stock index ended up 0.7 percent at a three-week high.

On Monday, both the Dow Jones industrial average and the S&P 500 closed at record highs, the third straight day for the latter, after lacklustre economic data raised hopes that the U.S. Federal Reserve would hold off raising interest rates.

The National Association of Home Builders said its index of members’ sentiment fell to 54 points in May from 56 in April, short of a forecast increase to 57 among economists polled by Reuters.

U.S. Treasuries sank as stocks gained, and higher yields underpinned the dollar. The yield on benchmark 10-year Treasuries notes stood at 2.221 percent, not far from its U.S. close of 2.228 percent on Monday.

 

Financialtribune.com