European markets shrug off weak Chinese trade data

AP News
Posted: May 09, 2016 8:32 AM
European markets shrug off weak Chinese trade data

LONDON (AP) — European stock markets brushed aside soft Chinese trade figures to register big gains Monday as investors think that last week's weaker than anticipated U.S. jobs report means the Federal Reserve is less likely to raise interest rates next month.

KEEPING SCORE: In Europe, Germany's DAX advanced 1.8 percent to 10,041 while the CAC-40 in France rose 1.2 percent to 4,354. The FTSE 100 index of leading British shares was 0.3 percent higher at 6,144. Wall Street looked set for modest gains too, with Dow futures and the broader S&P 500 futures up 0.2 percent.

PAYROLLS LINGER: Last week's figures showing that the U.S. economy generated a smaller than expected 160,000 jobs in April is the main driver in markets as many traders think the likelihood of a June rate hike from the Fed has fallen.

ANALYST TAKE: "What may be supporting markets this week is last week's jobs report which many have perceived to have been weak enough to further warrant the Fed holding back on rate hikes," said Craig Erlam, senior market analyst at OANDA.

CHINESE TRADE: Those Fed hopes have helped shore up sentiment in the markets in the face of weak Chinese trade figures that reinforced concerns over the state of the world's number 2 economy. Exports contracted by 1.8 percent in April from a year earlier and imports plunged 10.9 percent. Exports so far this year are down 7.7 percent, though that is an improvement over March's 9.6 percent year-to-date decline. The Shanghai Composite Index did fall in response to the trade data, ending the session 2.8 percent lower at 2,832.11.

GERMANY BOOST: Germany's DAX stock index was the standout performer in Europe after figures showed factory orders up strongly in March. The Federal Statistical Office said new orders in manufacturing rose by 1.9 percent in March compared with the previous month. It also adjusted February's decline to a drop of only 0.8 percent over January, compared with the 1.2 percent drop initially reported.

ASIA'S DAY: Seoul's Kospi was off 0.4 percent at 1,967.81 while Tokyo's Nikkei 225 advanced 0.7 percent to 16,216.03 and India's Sensex rose 1.4 percent to 25,585.71. Sydney's S&P-ASX 200 rose 0.5 percent and Singapore also advanced.

ENERGY: Oil prices were flat, with the benchmark New York rate up 4 cents at $44.70 a barrel while Brent crude, used to price international oils, fell 22 cents to $45.17 in London.

CURRENCIES: The yen gave up some recent gains, with the dollar up 1.1 percent at 108.29 yen. The euro, meanwhile, was flat at $1.14.