Global Stocks Rise as China's Economy Shows Gains

Date : 12/16/2019 @ 2:01PM
Source : Dow Jones News
Stock : FTSE 100 Index (UKX)
Quote : 7403.92  -32.72 (-0.44%) @ 4:35PM
FTSE 100 share price Chart

Global Stocks Rise as China's Economy Shows Gains

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3 Months : From Nov 2019 to Feb 2020

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By Avantika Chilkoti 

Global stocks started the week higher as data signaled an improvement in the Chinese economy, adding to optimism that some of the biggest risks to markets are clearing.

Futures tied to the Dow Jones Industrial Average edged up 0.2% on Monday, while the Stoxx Europe 600 index gained 1.3% to reach an all-time high. In Asia, the Shanghai Composite Index closed up 0.6%.

Fresh data showed that Chinese economic activity, including factory production and consumer spending, improved in November. The better-than-expected results may help alleviate investors' concerns about growth in the world's second-largest economy.

Markets were buoyed last week as some of the major risks facing global economic growth -- the U.S.-China trade spat, changes to the North American Free Trade Agreement and uncertainty around Brexit -- appeared to ease. On Friday, the U.S. reached a truce with China after securing a pledge from Beijing to boost purchases of agricultural products, bringing a temporary halt to tensions that have rocked markets for most of this year.

"Unless we get any bad data I think the market is going to continue to ride because this was a big, big hurdle cleared for markets with this 'phase one' deal," said Esty Dwek, head of global market strategy at Natixis Investment Managers, adding that earnings expectations for 2020 are now turning sunnier too.

Ahead of the opening bell in New York, shares in Boeing declined 4%. The aerospace company is considering either suspending or cutting back production of the 737 MAX, The Wall Street Journal reported. Deepening production cuts would inflate Boeing's costs and trigger charges against its financial results as fixed expenses would be spread among fewer planes.

International Flavors & Fragrances fell 4.8% in premarket trading after DuPont de Nemours reached a deal to combine its nutrition business with IFF in a deal that will give DuPont a $7.3 billion cash payment and about 55.4% of the new company. Shares in DuPont gained almost 5%.

Over in the U.K., the FTSE 100 index, which tracks the biggest companies in the country, rose over 2% in its largest one-day rally since February. The gauge is extending gains from last week following Prime Minister Boris Johnson's resounding majority in the general elections. The result, analysts said, paves the way for the U.K. to leave the bloc at the end of next month, clearing some of the political uncertainty that has hung over the economy since the 2016 Brexit referendum.

"It takes the risk of a no-deal Brexit immediately off the table and it gives you some certainty, so that's better than where we were," said Thomas Pugh, U.K. economist at Capital Economics.

Within European equities, shares in Electrolux dropped over 10% after the Swedish appliance maker announced that a reorganization of its manufacturing in the U.S. will hit fourth-quarter operating income.

Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com

 

(END) Dow Jones Newswires

December 16, 2019 08:46 ET (13:46 GMT)

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