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Global Stocks Rise, Anticipating G20 Finance Meeting

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February 24
6:29 AM 2016

Starting Monday, global stocks rise. Investors are anticipating the G20 finance ministers' meeting which to be held in Shanghai on Friday.

In European market, German Index DAX started the week by gaining 1.3% to 9,513.61 points and France's CAC-40 rose 1.2% to 4,273.55. The increase in early trading recovered Friday's 0.8% lost for DAX and 0.4% for CAC-40.

While in Wall Street, as CBS News reported, two major indexes was up 1.1%, Dow Jones o Average and Standard & Poor's 500. As on Friday DJIA lost 0.1% and S&P 500 decline by one point. On Monday trading, Nasdaq composite index also gained 0.4%.

In Asia, Shanghai Composite Index climbed 2.3% to 2,927.18 points, Tokyo's Nikkei 225 rose 0.9% 16,111.05 and Hong Kong's Hang Seng advanced 0.9% to 19,464.09. Taiwan, Singapore, India and Jakarta also gained while KOSPI was stable and New Zealand fell.

An analyst at OANDA Stephen Innes said in a report, "The weekend meeting of G20 Finance Ministers will be the major focus this week with global growth woes likely to be the event headline." However, according to the Canadian-based trader, "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."

Starting Friday to Saturday, finances ministers of G20 will attend a meeting at the Shanghai Grand Hyatt Hotel. The meeting will be a discussion forum between government and private-sector leaders in international finance to discuss and share perspectives on key G20 agenda topics. Such key topics are global economy and world trade, capital flows, infrastructure investment; sovereign debt restructuring, and sustainable finance.

Anticipating the meeting, global markets were rising. Following the stock market, as reported by USA Today, U.S. stock futures were also sharply higher Monday. Crude oil in the US increase 4.4% to $30.84 a barrel and Brent crude jumped 4.1% to $34.99. Investor have high hope that the G20 meeting will create a stimulus to reinforce global growth.

Apart of its stock market, Asia's economy in particular have mixed reaction. Bank of Japan still faces the pressure from its negative rate policy and strong yen, while overall economy is still good. As CNBC reported, Mizuho Bank and Barclays forecasted the headline inflation to be at 0.0%, after a 0.1% rise in December.

While Japanese manufacturing showed an eight-month low in February, mostly because of weak export demand as yen strong trait continues. Nikkei Flash Japan Manufacturing Purchasing Managers' Index showed the slowest rate of production in 10 months, and the lowest new export orders in three years. Marcel Thieliant of Capital Economics wrote, "business sentiment has suffered from the sharp falls in the equity market and the stronger yen."

Since Monday, global stock were anticipating G20 finance ministers meeting in Shanghai on Friday. However, economy are having mixed reaction, notably in Japan as the central bank's still struggle to manage the outcome of its negative rate policy and stronger yen.

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