stock

Asian Shares Go Up As U.S. GDP Strengthens

On Monday, global shares rose as a result of data showing an increase in profits among Chinese industrial firms for the first time in the past four months. A strong reading of the first quarter growth in the U.S. also aided the rise in global shares.

The MSCI All-Country World Index of shares, responsible for tracking stocks in over 47 countries went up by 0.06 percent after the European trading started.

The pan-European STOXX 600 index went up 0.1 percent while most of the major European stock markets traded firmer.

However, Spain’s IBEX 35 index did not perform well as it went down over half a percent after Pedro Sanchez, the Prime Minister overcame a challenge put forward by the right-wing nationalists in elections. Interestingly, the elections did not impact the country’s bond market much.

Italian bank shares got a much-needed boost as the Italian government bonds rallied as the S&P Global confirmed the country’s credit rating.

Investors remain uncertain over the outlook for the global economy. The investors are currently looking forward to a meeting between the U.S. Federal Reserve and Chinese factory data for additional clues on which direction the policy of the world’s biggest economy will take.

According to Konstantinos Anthis, the head of research at ADSS, important catalysts seem to be pointing higher. Low inflation and strong domestic growth the Federal Reserve at bay, yet could cause a rate cut as it seems that the equities can only go higher from this point onwards.

Chinese blue-chips went up by 1 percent after it went down by 5.6 percent the previous week. This led to an intraday high in afternoon trade.

The Australian shares went down by 0.4 percent after it hit an eleven-year closing high. At the same time, Seoul’s KOSPI went up by 1.4 percent.

The financial markets in Japan remained closed for the long national holiday this week. Nikkei 225 futures index went up by 0.9 percent in Singapore.

Jordan Rochester, a strategist at Nomura FX noted that the U.S. GDP from last week was driven by a sudden surge in government spending as well as a huge contribution from net trade. He does not expect this to sustain through the coming weeks as market reaction remains limited.

However, in the past week, U.S. equity prices have dominated the past week. Rochester also sees this week as a test of the new trend.

Share

Mary Conn has been a news writer for last 10 years. Recently she joined FinanceThrive team as a news editor. She regularly contributes in-depth news articles of finance industry covering personal & government financing, investment, business, economy and stock market.

Leave a Reply

Your email address will not be published. Required fields are marked *