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AFP
September 10, 2019

Global stocks rise on Chinese stimulus, sterling gains

Business

AFP
September 10, 2019

London: Global stock markets mostly climbed on Monday after China unveiled fresh stimulus measures, while below-par US jobs data reinforced expectations the Federal Reserve would cut interest rates this month.

London equities fell on a rising pound, which jumped on official data that showed the British economy grew by 0.3 percent in July, reducing the likelihood of a UK recession this year.Sterling also won support before a critical vote on an early UK general election.

Elsewhere, the euro wavered as dealers mulled speculation that the European Central Bank could decide this week to loosen monetary policy. "One broad theme is the prospect of monetary stimulus, which may be propping up some markets today," said City Index analyst Fiona Cincotta. "There are significant fears that the global economy is running out of puff."

Sterling jumped half a percentage point against the dollar meanwhile, pushing down London´s benchmark FTSE 100 index which features numerous multinationals with earnings in the US unit.

Britain´s parliament is to shut for business later Monday in a suspension ordered by Prime Minister Boris Johnson in an apparent bid to stop MPs blocking no-deal Brexit on October 31. "While parliament seems to be falling apart, the economy is holding up reasonably well," noted Paul Dales, chief UK economist at research consultancy Capital Economics. "July´s surprisingly strong rise in GDP suggests that it has not fallen into a recession."

Most Asian markets started Monday on a positive note to build on last week´s gains after China unveiled fresh stimulus measures and below-par US jobs data reinforced expectations the Federal Reserve will cut interest rates this month.

The People´s Bank of China on Friday said it would slash the amount of cash lenders must keep in reserve to its lowest level in 12 years, freeing up more than $100 billion for the stuttering economy. Asian investors were broadly upbeat on the move, while a weaker-than-forecast reading on US jobs creation increased the chance the Fed will reduce borrowing rates again at its policy meeting this month.

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