World Economy

Asia Stocks Rise

Asia Stocks RiseAsia Stocks Rise

 Chinese shares led Asian markets higher on Monday, defying a dive on Wall Street, while the price of Brent crude plumbed 11-year lows on renewed worries over a global oil glut.

European shares are unlikely to follow Asia’s example, with spreadbetters expecting Britain’s FTSE 100 and France’s CAC40 to open down about 0.6%, and Germany’s DAX to start the day 0.5% lower, Reuters reported.

Brent crude futures slumped as low as $36.17 a barrel, the lowest since 2004 as production around the world remained at or near record highs, and a strong dollar following last week’s US rate increases weighed on demand.

They were 1.3% lower at $36.41 while US crude slid 24 cents to $34.49 a barrel, close to Friday’s 2015 lows.

Amid thin trading in a holiday-heavy week, MSCI’s broadest index of Asia-Pacific shares outside Japan extended gains to 0.3%, as investors bid up modestly priced Chinese blue-chips.

China’s CSI300 index surged 2.9% and the Shanghai Composite jumped 2%. Hong Kong’s Hang Seng rode the Chinese market’s coattails to climb 0.4%.

Australia’s main index ended the day little changed. Japan’s Nikkei extended losses from Friday to close down 0.4%.

The market took a hit late Friday after the Bank of Japan announced some changes to its massive stimulus program but stopped short of expanding the net amount of assets it buys, disappointing some who had hoped for a more aggressive move.

That in turn sent the yen broadly higher and caused some wild swings against the dollar. The dollar was down at 121.32 yen after touching 123.58 on Friday. The dollar slipped 0.1% to 98.62 against a basket of currencies amid very light trade, and the euro rose 0.1% to $1.09.

Wall Street also had a volatile end to the week with the expiration of stock and index options contracts generating heavy trading volume.

The Dow ended Friday down 2.1%, while the S&P 500 lost 1.78% and the Nasdaq 1.59%. For the week, the Dow fell 0.8%, the S&P 500 0.3% and the Nasdaq 0.2%.

Other commodities however didn’t fare as well. London copper edged back as weak demand outweighed news that China’s smelters are considering deeper production cuts. Three-month copper was steady at $4,682.50 a ton, hovering near the 6 1/2 year lows seen in November.

The global background is one of disinflation given the weakness in oil and other commodity prices and the mounting spare capacity in major exporters such as China.

Inflation expectations for five years ahead have taken a marked turn lower this month, dropping to 2.11% from a high of 2.24%.