A look at the day ahead in European and global markets from Rae Wee
After days of drowning in headlines about Donald Trump’s return to the White House, investors got a bit of a diversion on Thursday with the announcement of new Chinese measures to bolster its ailing stock market.
Beijing plans to channel hundreds of billions of yuan a year from state-owned insurer funds into the stock market, including at least 100 billion yuan ($13.75 billion) in the first half of this year, according to China Securities Regulatory Commission chief Wu Qing.
Chinese authorities are urgently trying to shore up their weak stock markets, which have seen major benchmarks fall 3% so far this month despite gains in major stock markets elsewhere.
China’s blue-chip index and jumped more than 1% on the news, as did , though they have since given up some of those gains.
News from China provided little support to MSCI’s broadest index of Asia-Pacific shares outside Japan, which retreated on Thursday after seven straight sessions of gains.
European stocks also looked poised for a negative open along with their US counterparts, suggesting that enthusiasm over Trump’s massive spending plans for artificial intelligence infrastructure may be waning after stocks rose on Wednesday.
Trump offered few details on how the $500 billion private sector investment would be financed, though The Information reported that OpenAI and Japanese conglomerate SoftBank ( TYO: ) would each invest $19 billion in the project.
Thursday’s data calendar is weak in Europe. Norges Bank is due to make a rate decision, which is expected to keep rates on hold.
The Bank of Japan kicked off its two-day policy meeting on Thursday and markets had roughly priced in a 25 basis point interest rate hike following a hint last week from BOJ policymakers.
Both an expected interest rate hike and an express promise of further hikes are likely to be needed to stem a renewed slide in the yen, which on Thursday continued to pull away from a one-month high earlier in the week.
Key events that could affect the markets on Thursday:
– Decision on the Norwegian bank rate
– Weekly US jobless claims
– American Airlines (NASDAQ:), General Electric (NYSE: ) earnings
(Writing by Rae Wee; Editing by Edmund Klamann)
