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Chinese trade data fuels global stock markets profit

April 13
8:18 AM 2016

Stocks in the US had a higher opening on Wall Street on the optimistic thought of additional Chinese economic incentive. Energy stocks were the biggest winners on Monday trading session since the oil industry rose to a new height after its historical low in the beginning of 2016. Williams Companies climbed 5% on Monday.

The US crude price increased 2% to $40 per barrel in New York. While Dow Jones industrial average gained 95 points or 0.6%, to 17,676 on Monday. The S&P's 500 jumped 10 points, or 0.5%, to 2,058 and the Nasdaq gained 20 points, or 0.4%, to 4,870. However, prices of bond dropped on Monday and the 10-year Treasury note's yield increased to 1.75%, as reported by abcNEWS.

Global stocks improved after a series of decline in a year, helped by Chinese trade number that showed signs of economic recovery across the world. The metal industry was the biggest beneficiary of the trade data. Stocks in Europe increased for a fourth day while developing markets' stocks reached their peak since November. Chinese stocks listed in Hong Kong index increased the most aided by the rise in exports figure.

China's exports increased in March, the highest in a year, while the drop in import numbers reduced, boosting growth forecast. Chinese gross domestic product is expected to increase 6.7% during the first quarter. Positive hopes on the oil price hike are also driving global equities despite the anticipated worst earnings season in the US.

Bloomberg quoted Benno Galliker, Luzerner Kantonalbank AG's trader, who said, "The commodity sector is well supported by the good numbers out of China." Europe equities traded in StoxxEurope 600 index was up 2%, moving towards its extended gaining streak in over a month. The Hang Seng China Enterprises key climbed 4% while the Shanghai Composite improved 1.4%.

Meanwhile, in the currency market, Japanese yen dropped 0.6% against the US dollar. According to Yutaka Harada, board member of Japan's central bank, economic recovery in the country is slow and prices seem to be weak. In the commodity market, copper increased 1.2% to $4,823 per metric ton after China improved its imports to an all-time high.

China's overseas sales, in dollar terms, increased 11.5%, while imports dropped 7.6% in March. Chinese currency recorded a 1.9% increase over the US dollar in the previous two months. The International Monetary Fund underlined China as a positive market among other major markets, as reported by Financial Times.

Steel exports in China increased by 30% to 9.98 million tonnes in March 2016. The trade data comprised a Rmb194 billion trade excess in March. Overseas exchange reserves in China jumped $10.3 billion to $3.2 trillion in March 2016.

Chinese trade data boosted stocks movement across the globe, stopping the slowdown sequence in a year. Analysts view Chinese stimulus data as a sign of macroeconomic recovery.

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