World Economy

Asian Shares Mixed, European Stocks Rebound

Asian Shares Mixed, European Stocks ReboundAsian Shares Mixed, European Stocks Rebound

Most Asian stocks began the week in negative territory as Japan revealed its economy shrank in the April to June period.

Japan’s Cabinet Office said gross domestic product contracted by 0.4% compared to the previous three months, slightly bettering analyst forecasts for a 0.5% decline, Reuters reported.

On an annualized basis, the economy shrank 1.6% for the quarter following a revised expansion of 4.5% in the first three months of the year.

The Nikkei benchmark index was up by 0.2% at 20,559.59 points at mid-day.

Analysts said the contraction in the Japanese economy resulted due to tepid household spending and sluggish exports.

“If weak private consumption persists, that would be a further blow to Abe’s administration, which is facing falling support rates ahead of next year’s upper house election,” Credit Suisse chief economist Hiromichi Shirakawa told Reuters. “This could raise chances of additional fiscal stimulus.”

Mainland China’s Shanghai Composite Index was down by 0.1% at 3,960.61, while the Hang Seng dipped 1% to 23,754.21.

Earlier, China’s central bank held its daily fixing rate for the yuan broadly steady against the US dollar after devaluing the currency by more than 3% last week. The midpoint rate was set at 6.3969 per dollar compared to August 14 close of 6.3975.

Elsewhere in the region, Thailand posted 2.8% year-on-year GDP growth for the second quarter, easing from the 3% expansion in the preceding three months.

In South Korea, the Kospi index fell by 0.4% to 1,975.42 as trading restarted following a long weekend.

Australia’s S&P/ASX 200 benchmark rose 0.3% to 5,374.90 points. Meanwhile, markets in Indonesia were closed for Independence Day.


European stocks rose on Monday, rebounding from losses last week caused by worries over currency devaluation in China, with shares in French industrial group Alstom outperforming.

The pan-European FTSEurofirst 300 index, which fell 3% last week, rose 0.6% while the eurozone’s blue-chip Euro STOXX 50 index progressed 0.8%.

Alstom shares rose 6.2% after two people familiar with the matter told Reuters that General Electric was expected to get EU approval for a proposed €12.4 billion ($13.8 billion) bid for Alstom’s power business.

Shares in Hennes & Mauritz advanced 2% after the fashion retailer reported higher sales.

Equity strategists at JP Morgan said China’s currency devaluation last week was not a game changer for stocks. “We remain bearish on commodity equities, but believe the weakness in consumer plays should not continue,” strategist Mislav Matejka said.

Both the Euro STOXX 50 and FTSEurofirst are up around 10% since the start of 2015, as economic stimulus measures from the European Central Bank have helped to prop up the region’s stock markets in the face of worries over China and Greece’s debt problems.

The Athens stock market rose 1.8% percent on Monday, but remains down by nearly 20% since the start of 2015.