World Economy

Global Shares Gain as Finance Leaders Back Easy Money

The German share price index, DAX board, is seen at the stock exchange in Frankfurt.The German share price index, DAX board, is seen at the stock exchange in Frankfurt.

Shares rose in Europe and Asia on Monday after leaders of global finance appealed at a weekend meeting of the International Monetary Fund for a continuation of low-interest rate policies to keep economic recoveries on track.

Germany’s DAX edged 0.2% higher to 13,012.00 and the FTSE 100 was up 0.1% to 7,546.05. The CAC 40 of France added 0.3% to 5,365.57. Dow futures added 0.1% to 22,845.00 and S&P 500 futures were almost unchanged, pointing to a steady start for the week on Wall Street, AP reported.

Japan’s Nikkei 225 index added 0.5% to 21,255.56 and Hong Kong’s Hang Seng index surged 0.8% to 28,692.80. South Korea’s Kospi rose 0.3% to 2,480.05 and the S&P ASX/200 advanced 0.6% to 5,846.80. India’s Sensex picked up 0.6% to 32,612.52, but the Shanghai Composite index slipped 0.4% to 3,378.47. Shares in Southeast Asia were higher.

Finance ministers declared the recovery from the 2008 financial crisis incomplete and said central banks should stick with low interest rates that make borrowing attractive to safeguard the still fragile world economy.

The meeting in Washington also focused attention on the failure of such policies to fuel inflation outside of financial markets. The 189-nation IMF’s communique warned there “is no room for complacency” as nations confront new challenges to global growth from a range of threats, including cyber security attacks and more violent weather patterns linked to climate change.

“In the face of protectionist threats, global economies have enjoyed a synchronized upswing this year amidst a pickup in trade activity, but even then the outlook is not entirely rosy,” Mizuho Bank said in a commentary. “To begin with, it is becoming increasingly evident that persistently low inflation has become a puzzle, even to central bank policymakers,” it said.

World stocks and commodities rose on Monday, boosted by upbeat Chinese data, while US oil futures jumped to a near six-month high as an escalation in fighting between the Iraqi government and Kurdish forces threatened supply.

Copper hit three-year highs. Prices of iron ore and coke, key ingredients in steel-making, jumped with Dalian iron ore futures, rising 2.5% to a 2-1/2 week high while coke for January delivery gained 1.6%.

The IMF last week upgraded its global economic growth forecast for 2017 by 0.1 percentage points to 3.6%, and to 3.7% for 2018, from its April and July outlook, driven by a pickup in trade, investment and consumer confidence.

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