Asian indices saw a rally today as weak Chinese economic data did not deter traders in the east. The key factor responsible for taking Asian shares higher was an announcement by Chinese regulators ruling out the withdrawal of funds from the market.
Slowdown continues in China
The statement eased some worries about an ongoing Chinese slowdown. Retail sales in the People’s Republic fell to 10.2% from 11.1% while industrial production growth too slowed down to 5.4% from 5.9%.
Markets chose to remain positive ahead of policy meeting decisions by multiple central banks this week. Bernard Aw, a market strategist at IG, Singapore, holds the view that the Federal Reserve is less likely to increase interest rates though economic conditions have nonetheless improved.
Sentiment Largely Positive
Australia’s ASX All Ordinaries rose 0.34% to 5,242.40 today. Weak Chinese economic data left no dent on the country’s major index, the Shanghai SE Composite, which closed 1.75% higher at 2,859.50. Hang Seng finished 225.68 points up at 20,425.28 while Japan’s Nikkei 225 added up 1.74% to 17,233.75. Taiwan TSEC 50 Index inched up 0.48% to 8,747.90 during today’s session.
The reaction was similar in markets, which opened steeply higher ahead of the major policy decision by the Central Bank. Germany’s DAX hit a two-month high and breached the 10,000 point level today. The index was trading 156.38 points up at 9,987.51. FTSE 100 rose 0.56% to 6,174.09 and Euronext 100 surged 0.56% to 879.54. France’s CAC 40 ticked up by 0.50% to 4,515.09 while the Swiss Market Index surged 0.49% to 8,037.36.
Back in the U.S., though stock markets closed the week in a cheerful mood, Monday has opened up marginally lower. The rebound in oil prices and investors’ positive reaction to the ECB’s stimulus drove the markets last week. This week it will be other central banks.