AP and AFP
BEIJING/HONG KONG–Global stocks rose sharply Monday as subdued Chinese inflation, a rebound by Japanese markets and the latest easing of tensions over Ukraine helped offset unease about Iraq. In morning European trade, German’s DAX surged 1.4 percent to 9,132.36 and France’s CAC-40 added 1 percent to 4,189.48. Britain’s FTSE 100 gained 0.8 percent to 6,619.15. Futures for the Dow Jones industrial average and the broader Standard & Poor’s 500 both rose 0.3 percent. On Friday, the Dow added 1.1 percent and the S&P was up 1.2 percent. “Overall, we saw a return of risk appetite with flows returning to equities while safe havens like the yen, gold and treasuries slid,” said Desmond Chua of CMC Markets in a report.
Asian markets rose Monday following widespread falls last week, after Wall Street shrugged off fears over instability in Iraq and Ukraine. Tokyo rebounded 2.38 percent, closing up 352.15 points at 15,130.52 and making up much of the 2.98 percent dip it suffered Friday after U.S. President Barack Obama’s announcement that he had authorized air strikes in Iraq. Hong Kong closed up 1.29 percent, or 314.61 points, at 24,646.02 while Shanghai gained 1.38 percent, or 30.22 points, to 2,224.65. Other regional markets saw more modest gains. Sydney rose 0.40 percent, or 21.7 points, to 5,457.0 while Seoul was up 0.41 percent, or 8.27 points, closing at 2,039.37. Last week ended on a sour note for most Asian markets as worried investors took fright from a ramping up of instability in Iraq, where the U.S. has been launching air strikes against extremist militants besieging ethnic minorities in the country’s north. The Dow Jones Industrial Average rose 0.37 percent over the week, or 60.56 points to end at 16,553.93. The tech-rich Nasdaq Composite Index added 0.42 percent, or 18.26 points to 4,370.90. Analysts said Asian market players were still keeping a close eye on the global geopolitical situation, but investors were beginning to feel both the Ukraine and Iraq conflicts were de-escalating.
“On an interim-term view, geopolitics remain at the forefront of investors’ decision-making,” wrote Evan Lucas at Melbourne-based IG Ltd in a note.
The conclusions from the weekend “are that conflicts are cooling,” he said. But risks remain. Over the weekend Ukraine’s army shelled the main rebel bastion of Donetsk, as Russia called for a humanitarian ceasefire which the West warned could be a pretext by Moscow to send in troops.