HONG KONG — World stock markets rose Tuesday, led by strong gains in Asia as an upbeat forecast for global economic growth and the end of the U.S. government shutdown helped lift sentiment.
KEEPING SCORE: European shares rose in early trading. Germany’s DAX climbed 0.9 per cent to 13,590.97 and France’s CAC 40 added 0.4 per cent to 5,563.58. Britain’s FTSE 100 rose 0.1 per cent to 7,725.94. Wall Street was poised to open higher. Dow futures gained 0.4 per cent to 26,295.00 and broader S&P 500 futures were up 0.2 per cent to 2,840.60.
GLOBAL GROWTH: The International Monetary Fund upgraded its outlook for the world economy, estimating that the world economy expanded at a 3.7 per cent annual pace last year, the fastest since 2011. It forecast that growth will accelerate to 3.9 per cent in 2018-19. The IMF noted surprisingly strong growth in Europe and Asia and predicted that U.S. tax cuts will give the American economy a short-term boost.
SHUTDOWN: President Donald Trump signed a bill ending the U.S. federal government shutdown after nearly three days. Democrats agreed to a stopgap funding measure in exchange for Republican promises to resume debates on immigration and other issues. The agreement helped boost Wall Street though its effect on the dollar was minimal.
THE QUOTE: “Investors are likely to ignore the overstretched valuations and continue moving with the flow,” said Hussein Sayed, chief market strategist at FXTM. “Many factors are likely to keep fueling the rally including, positive earnings, merger and acquisition deals, and the upsurge in global growth. The IMF joined the party” with its upgraded forecast, he added.
BANK OF JAPAN: Policymakers did not make any changes to the Japanese central bank’s unprecedented monetary stimulus even though growth in Asia’s second-biggest economy has ticked higher. Bank of Japan officials opted at their latest policy meeting to stick with massive asset purchases and negative interest policy aimed at spurring inflation even as their counterparts in the U.S. and Europe have begun dialing back their stimulus programs.
TARIFFS: Trump approved tariffs on imported solar-energy components and large washing machines, in a move aimed at helping U.S. manufacturers. The tariffs, aimed at cheaper imports from rival makers in places like China and South Korea, raise the threat of a trade war between the U.S. and Asia. The companies that sought the tariffs said 30 U.S. solar-manufacturing facilities shut in the past five years as China flooded the global market with cheap products. China said the move was an abuse of trade remedies.
ASIA’S DAY: Japan’s benchmark Nikkei 225 index jumped 1.3 per cent to close at 24,124.15 and South Korea’s Kospi advanced 1.4 per cent to 2,536.60. Hong Kong’s Hang Seng rose 1.7 per cent to 32,930.70 and the Shanghai Composite in mainland China climbed 1.3 per cent to 3,546.50. Australia’s S&P/ASX 200 gained 0.8 per cent to 6,037.00. Indexes in Taiwan and Southeast Asian also rose.
CURRENCIES: The dollar slipped to 110.73 yen from 110.93 yen in late trading Thursday. The euro weakened to $1.2231 from $1.2263.
ENERGY: Oil futures extended gains. Benchmark U.S. crude rose 29 cents to $63.86 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 26 cents to $63.57 a barrel on Thursday. Brent crude, used to price international oils, added 24 cents to $69.27 a barrel in London.
