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Global Stocks Gain on China Stimulus Hopes; Oil Up Further

Benchmark U.S. crude rose 19 cents to $43.21 per barrel in New York
By The News · 09 of August 2016 07:18:29
A currency trader watches monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, No available, photo: AP/Ahn Young-joon

Global stock markets rose Tuesday as slack Chinese consumer price figures stoked expectations of more stimulus policies. Oil prices rose further after reports of a new OPEC meeting.

KEEPING SCORE: Britain’s FTSE 100 added 0.4 percent to 6,832 and France’s CAC 40 gained 0.6 percent to 4,443. Germany’s DAX rose 0.8 percent to 10,516. Futures showed that U.S. stocks were set for some gains, with Dow and S&P futures up 0.1 percent.

CHINA DATA: China’s consumer price index rose 1.8 percent last month over a year earlier, slower than June’s 1.9 percent. The July figure is the third monthly drop in a row since April, when the consumer price index reached its highest level since July 2014. It also was below the government’s 3 percent inflation target. The news came a day after China reported exports fell in July, and increased investors’ expectations of more stimulus measures from Beijing to soften the economy’s slowdown.

OPEC MEETS: Oil was also in focus after the Organization of the Petroleum Exporting Countries announced that oil ministers of the 14-nation organization will meet next month, well ahead of their previously scheduled November meeting. It is unusual for OPEC to gather outside of their regularly set meetings and Monday’s report pushed up the price of crude oil overnight.

Benchmark U.S. crude rose 19 cents to $43.21 per barrel in New York, adding to the $1.22 gains made on Monday. Brent crude, used to price international oils, rose 11 cents to $45.50 per barrel in London.

ANALYST’S TAKE: “News that OPEC would be having a September meeting with certain members keen to push for supply cuts again served as the impetus for oil prices to rally. While a deal is highly unlikely to eventuate, the fact that it is even being mentioned shows how much difficulty the past month’s renewed sell-off was causing many struggling OPEC members,” Angus Nicholson, a market analyst at IG in Melbourne, Australia, said in a daily commentary.

ASIA’S DAY: Earlier, Japan’s Nikkei 225 finished 0.7 percent higher at 16,764.97 and South Korea’s Kospi climbed 0.6 percent to 2,043.78. Hong Kong’s Hang Seng index fell 0.1 percent to 22,465.61 while China’s Shanghai Composite Index gained 0.7 percent to 3,025.68. Stocks in Australia, Taiwan and the Philippines were higher.

CURRENCIES: The dollar weakened to 102.19 yen from 102.36 yen while the euro was flat at $1.1086. The British pound fell to $1.2974 from $1.3040 after some relatively weak U.K. trade figures.