Asia
A modest rebound in US equities after last week’s volatility helped settled the nerves of Asia-Pacific investors on Tuesday. Hong Kong’s Hang Seng regained almost all of the points lost in Monday’s sharp fall, ending the day above 30,000 points after a gain of 2% on Tuesday. Japan’s Nikkei 225 was not too far behind in percentage terms, but at 21,417 points is still well below the 24,000 level seen at the start of the year.
It’s a big week for economics in Japan and China: the Bank of Japan makes its monthly monetary policy decision amid speculation that its ultra-loose monetary policy will begin to be unwound from 2019 onwards. China exports, imports, foreign direct investment and trade balance figures will be in view on Thursday.
Europe
Among eurozone exchanges, Germany’s Dax was one of the best performers on Tuesday, regaining some ground after recent weakness. Germany’s export-driven economy is thought to be particularly sensitive to the prospect of a trade war.
Italy’s FTSE MIB joined in the global gains with a rise of around 1% on Monday’s close despite the political uncertainty after the weekend’s inconclusive elections.
The FTSE 100 made a strong start to the day, helped by a big rise in the shares of paper and packaging firm Smurfit Kappa (SKG), which has rejected an unsolicited takeover approach from International Paper. Smurfit’s shares were up nearly 20% in morning trading. At the opposite end of the FTSE 100, recently promoted Just Eat (JE) lost nearly 9% as investors fretted over investment costs rather than the rise in customers and revenues. Full-year pre-tax losses were £76 million, against a profit the previous year of £91 million.
North America
Stock market futures suggest that US equities will maintain their positive start to the week. Last week’s wobble was inspired by fears of a trade war; this week investors are hoping that resistance by key Republican Party figures will scupper President Trump’s threats of swingeing tariffs on steel and aluminium imports.
In economics, January’s factory orders data will be released and durable goods numbers for the same month will get their final reading.
Influential Federal Reserve Bank of New York chief William Dudley will speak in the US Virgin Island today and in Puerto Rico tomorrow.
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