European shares lifted by rebound in China markets

AP and AFP

TOKYO — European shares got off to a strong start to the week Monday, helped by a rebound in the wobbly Shanghai Composite index, though other markets in Asia were mostly lower. Germany’s DAX gained 1.2 percent to 4,858.70 and the CAC-40 of France was up 1.0 percent. Britain’s FTSE 100 rose 0.7 percent to 5,848.09. U.S. markets are closed for a public holiday on Monday. But Dow futures were up 0.8 percent and S&P futures gained 0.7 percent, suggesting an improvement in sentiment following Friday’s rout on Wall Street.

Mainland China’s fourth-quarter growth figures due Tuesday will likely show that strong consumer spending offset slowing investment, keeping growth in the last quarter at about 6.8 percent or higher, analysts say. But recent volatility in Chinese markets has overshadowed those trends toward stabilization in China’s growth picture.

“Nerves are still heavily focused on China as we approach a major economic data dump from China,” Angus Nicholson of IG said in a commentary. “However, the calmer waters seen in mainland (Chinese) equities seems to have stemmed some of the sell-off in other regional markets from the initial horror open seen in Australia and Japan.”

Japan’s Nikkei 225 fell 1.1 percent to 16,955.57 and Hong Kong’s Hang Seng lost 1.5 percent to 19,237.45. The Shanghai Composite rebounded from early losses, gaining 0.4 percent to 2,913.84 and South Korea’s Kospi was nearly unchanged at 1,878.45. Australia’s S&P/ASX 200 fell 0.7 percent to 4,858.70. Markets in New Zealand and Southeast Asia declined. There were also sharp losses in Manila and Jakarta. Energy firms were among the big losers, with CNOOC in Hong Kong down 4.5 percent and PetroChina shedding 2.1 percent. Sydney-listed mining giant BHP Billiton was 2.9 percent lower and Woodside Petroleum retreated 2.6 percent. Inpex slipped 1.5 percent in Tokyo. The Chinese market was given some support by the People’s Bank of China’s decision to increase the yuan’s rate against the U.S. dollar. Its recent weakness has been a key contributor to a rout in global markets that has characterized the start of 2016. Markets are now nervously awaiting the release Tuesday of Chinese economic growth data for 2015, with analysts surveyed by AFP forecasting the slowest rate in 25 years. Worries about China’s economy have hit markets from Asia to the Americas over the past two weeks, with Beijing’s ability to handle the downturn brought into question.