Global stocks gain following reassurances from China on yuan
US market extends gains, follow global shares higher
(about 2 hours later)
MANILA, Philippines — Global stocks rose Friday after China’s central bank governor pledged not to devalue the yuan for the sake of export competitiveness. But gains were limited as G-20 financial leaders meeting in Shanghai offered mixed messages over the potential for new stimulus to stave off the risk of recession.
NEW YORK — U.S. stocks opened higher and remained on track for a second straight weekly gain on encouraging economic news in the U.S. and word from China that the country won’t devalue its currency to make its exports more competitive.
KEEPING SCORE: In Europe, Germany’s DAX gained 1.5 percent to 9,468.55 and France’s CAC 40 rose 1.4 percent to 4,307.24. Britain’s FTSE 100 climbed 0.9 percent to 6,065.10, though shares in RBS slumped 8 percent after it posted an eighth consecutive annual loss. Dow futures and S& P futures were both up 0.4 percent.
Markets around the world have been concerned about a rapid devaluation of the yuan, and they rose nearly everywhere Friday on hopes that China will moderate the decline.
CHINA CURRENCY: Zhou Xiaochuan, governor of China’s central bank, told a conference on the sidelines of a meeting of financial leaders of the Group of 20 industrial nations that Beijing would not engage in devaluations for the sake of its export competitiveness. Zhou urged that the gathering focus on managing lackluster global demand, structural economic reforms and promoting “sustainable and balanced” growth.
The Commerce Department reported that U.S. gross domestic product rose more than previously estimated in the fourth quarter.
ANALYST VIEWPOINT: “Taken alongside Ministry of Finance proposals that China can afford a fiscal deficit of 4 percent of GDP, further stimulatory support does look forthcoming in 2016,” Angus Nicholson of IG said in a commentary. “However, Zhou Xiaochuan is unlikely to be able to abide by all his statements today, at least if we take them at face value.”
The Dow Jones industrial average rose 83 points, or 0.5 percent, to 16,780 as of 9:35 a.m. Eastern time.
G-20 FINANCE AGENDA: Finance ministers and central bankers of the G-20 were seeking to douse hopes a two-day meeting in Shanghai that began Friday will produce specific growth plans similar to those rolled out in 2009 in response to the global crisis. Instead, many were urging faster progress on pro-growth structural reforms instead of relying on monetary and fiscal policy to boost growth.
The Standard & Poor’s 500 index rose 9 points, or 0.5 percent, to 1,961. The Nasdaq composite rose 33 points, or 0.7 percent, to 4,615.
ASIA’S DAY: Japan’s Nikkei 225 closed 0.3 percent higher to 16,188.41 while Hong Kong’s Hang Seng index rose 2.5 percent to 19, 364.15. Australia’s S&P/ASX 200 closed nearly flat at 4,880. The Shanghai Composite Index rose 1 percent to 2,767.21 after plunging 6.4 percent Thursday. South Korea’s Kospi rose 1.6 percent to 1,920.16. Markets in Southeast Asia rose and Taiwan was higher.
OIL: U.S. crude gained 35 cents to $33.42 a barrel in electronic trading on the New York Mercantile Exchange. It closed up 92 cents on Thursday. Brent crude oil, the global benchmark, rose 42 cents to $36.12 a barrel. On Thursday, it rose 63 cents.
CURRENCIES: The dollar rose to 112.83 yen from 112.30 in the previous day’s trading. The euro edge up to $1.1027 from $1.1020.
Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
