Global Market Report - April 10, 2018

A key speech by the Chinese President has helped global investors put aside fears over trade wars - for now at least

Morningstar 11/04/2561

Asia

A pro-globalisation speech by China’s President Xi Jinping helped markets in Asia-Pacific push their trade war anxieties down the agenda on Tuesday. Chinese and Hong Kong benchmarks showed the biggest gains in percentage terms. A late surge in the Shanghai Composite drove it to close less than 2% higher on the day, while the Hang Seng Index was nearly 500 points above Monday’s close.

China’s inflation figures are in focus on Wednesday morning.

A weakening in the yen against the dollar helped Japan’s Nikkei 225 and Topix indices to make ground, adding to Monday’s positive moves.

Europe

The political focus on Russia continues to unsettle that emerging market’s stock market and currency, with the ruble off against the dollar by 4% today. London-listed steelmaker Evraz (EVR) showed some minor signs of recovering on Tuesday after being caught up in fears over sanctions yesterday, when the share price slumped by 15%. Shares Frankfurt-listed EN+ (8EN), an energy company controlled by oligarch Oleg Deripaska, lost over 40% on Monday but were unchanged approaching midday today.

Germany’s Dax was the best performing exchange in Europe this morning in percentage terms as a rebound in sterling held back the FTSE 100’s gains. Miners were back in favour in London’s main market after yesterday’s selloff, not least because of Xi Jinping’s positive message about China’s relationship with the world.

North America

The economic and corporate calendar is relatively light on Tuesday but tomorrow sees the release of March inflation figures, which are expected to justify the increasingly hawkish stance of the Federal Reserve. The minutes of the Fed’s last meeting, where new chair Jerome Powell announced a quarter point rise in interest rates, will be in view on Wednesday too.

US stocks are expected to move up a gear on the back of the comments by the Chinese President, which have helped prop up most global markets.

 

 

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