Gobal Indices except China Gain Amid Favorable Data


Wednesday’s trading in Asia showed gains in major indices across the continent except China, ironically coming on the back of favorable China trade data.

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While the Shanghai Composite fell 2.4% today, the rest of Asia and Europe were broadly up. Japan’s Nikkei 225 is up another 2.9% today, with the Hong Kong’s Hang Seng shrugging off further weakness in mainland China next door.

The China factor

China’s strong December trade data was a major catalyst for the gains registered across Asia as the world’s second largest economy showed far greater resilience than the market expected. December exports increased 1.4% although analysts predicted that exports would shrink 8% in the month. The 7.6% fall in imports was also smaller than a fall of 11.5% that analysts expected.

December marked the first time that China’s exports improved after six months of sustained declines. China also reported that its trade surplus increased to $60.1 billion, beating analysts’ estimate of $53 billion and also exceeding the previous month’s figure of $54.1 billion.

US Indices Bounce With Oil

In the U.S., favorable employment data seemed to drive shares up despite a continued rout in crude oil prices. Domestic crude futures fell below $30 per barrel briefly, the lowest price level since December 2003. A strong bounce quickly followed bringing oil back up above $31.

Despite the continued oil freefall, major indices registered decent gains yesterday and futures are broadly up again today. The Dow Jones Industrial Average rose 0.72% to close the day at 16,516.22 after adding 117.65 with futures up in the triple digits again. UnitedHealth Group Incorporated (NYSE: UNH) led gains while EI du Pont de Nemours and Company (NYSE: DD) led losses, down 1%.

The NASDAQ Composite led US stocks, up 1.03% to add 47.93, finishing the day at 4686, with futures up another half percent this morning. The S&P 500 also finished strong yesterday and continues higher, with the index adding 15 points finishing the day at 1,938.68. Cognizant Technology Solutions (NASDAQ: CTSH) was the top performer up over 6%.

Leading sectors

In the U.S., technology, industrial, and healthcare shares were the bright spots while telecom and utility stocks were stragglers, but not enough to deny the major indices gains.




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