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Asian stocks rebound ahead of G20 FinMin meeting

February 22
7:12 PM 2016

Asian stocks recovered on Monday as investors are expecting some reassurance about global economy growth. Investors are looking to East Asia for more clues on the Asian economic state. The G20 Finance Ministers meeting is scheduled on Friday and Saturday in Shanghai. 

All the major Asian indices rose with an exception to New Zealand and Taiwan. Coming to the Wall Street, Dow Jones Industrial Average on Friday fell 0.1 percent, Standard & Poor's 500 index was almost flat on downside moving, while Nasdaq Composite index moved up marginally by 0.4 percent.

CNBC reports the sustained inflation is still elusive to Japan. The consumer price index is due on Friday. Bank of Japan (BoJ) is struggling to handle an uphill task of sustaining the economic recovery. Japan's headline inflation is forecast to ease further to zero percent after witnessing 0.1 percent rise in December 2015. 

Among the Asian indices that rose on Monday, Hong Kong's Hang Seng index rose 1.1 per cent to 19,848.52 points. The Shanghai Composite Index added one per cent to 2,887.28. Tokyo's Nikkei 225 rose 0.6 per cent to 16,059.98. Sydney's S&P/ASX 200 moved up 0.8 per cent to 4,994.50. Seoul's Kospi gained 0.1 per cent to 1,918.00 and Singapore and Jakarta also moved upwards. However, New Zealand and Taiwan indices declined. 

On the other hand, investors are pinning their hopes on the outcome of the G20 meeting of finance ministers as the rich and developing nations are expected to evolve more measures to propel the global economy growth. Japan's central bank governor also has convened a meeting on Friday and Saturday in Shanghai for a co-ordination work, according to CTV News. Analysts feel that the outcome will have limitations after several rounds of stimulus plans announced. 

Coming to the European markets, Germany's DAX added 1.3 percent to 9,513.61 points. France's CAC-40 gained 1.2 percent to 4,273.55. On Friday, the DAX lost 0.8 percent, while the CAC-40 and Britain's FTSE 100 both fell 0.4 percent.  The world's largest economy's curreny is moving up against Yen and Euro. The US dollar rose against the Japanese Yen to 112.92, while Euro inched down to $1.1111 from $1.1133. The US Brent crude rose 53 cents to $32.28 per barrel on New York Mercantile Exchange. 

The stocks in Japanese markets may face renewed pressure owing to sluggishness in the manufacturing sector, which fell to eight-month low. Recent drop in export demand was the prime reason for sluggish activity in the manufacturing sector. Nikkei Flash Japan Manufacturing Purchasing Managers' Index (PMI) indicated the slowest growth in 10 months as export orders fell to three-year low, according to The Kansas City Star

While investors are anxiously waiting for the outlook of G20 meeting, analysts play it down saying there wouldn't be much surprises. Stephen Innes of OANDA, said: "Don't expect any magic bullet solution to appear, but a policy consensus among ministers might go a long way to shoring up investors' sentiment."
The G20 meeting is considered to be the major even of the week for the global markets. Investors and corporate firms are concerned over the global growth woes. 

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