In This Article:
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Asian stock markets : https://tmsnrt.rs/2zpUAr4
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World stocks bounce on market support measures
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Nikkei rises 1.5%, S&P 500 futures up 0.1%
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Dollar firm on yen, underpinned by high 2-yr yields
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U.S. payrolls, EU inflation, China PMI due this week
(Adds comment in paragraph 8, updates prices)
By Nell Mackenzie and Wayne Cole
LONDON/SYDNEY, Aug 28 (Reuters) - World shares rallied on Monday after China announced measures to support its ailing markets, but Western markets remained cautious ahead of European and U.S. economic data expected later in the week due to determine central bankers' next steps.
Beijing on Sunday announced it would halve the stamp duty on stock trading in the latest attempt to boost the struggling market and followed steps to support housing. China's securities regulator also approved the launch of 37 retail funds.
World shares were up 0.3% in European trading. European stocks, led by technology shares and China-exposed automakers, also rose. The pan-European stock index had climbed 0.6%. The FTSE was closed for a holiday.
The help was needed given profits at China's industrial firms fell 6.7% in July from a year earlier, extending this year's slump to a seventh month.
In addition, China Evergrande Group lost as much as 80% of its market value on Monday after its shares resumed trading in a crucial step for the world's most indebted property firm as it seeks to restructure its offshore debt.
Foreign investors continued to flee from Chinese stocks, offloading a net 8 billion yuan ($1.10 billion), according to data from the Hong Kong Stock Exchange.
The Chinese blue chip stock index and the Shanghai Composite closed higher.
"If everything was rosy there would be no need for a stimulus," said Florian Ielpo, head of macro at Lombard Odier Investment Managers.
Unlike the bulk-sized packages announced in previous years, the latest measures represented a shift from the Chinese government to try and tactically lift market mood where it saw fit, said Ielpo.
The focus now moves to the official PMI for August, out on Thursday, which is still expected to show activity is in the red.
S&P 500 futures and Nasdaq futures edged up 0.2% and 0.3%, respectively, indicating the benchmark indices may extend last week's modest rise.
The market did manage to weather a slightly hawkish outlook from Federal Reserve chair Jerome Powell, who reiterated they might have to raise rates again but promised to move "carefully".
"The impression from the Fed has now become 50 shades of hawkish. We know rates will remain above 5% but the question remains for how long and how much higher?" said Lombard Odier's Ielpo.