China Data Boosts World Stocks And Commodities, Oil Jumps
World stocks and commodities rose on Monday, boosted by upbeat Chinese data, while U.S. oil futures jumped to a near six-month high as an escalation in fighting between the Iraqi government and Kurdish forces threatened supply.
Asian shares rallied to a decade high after figures showed China’s producer prices beat market expectations to rise 6.9 percent in September from a year earlier.
Copper hit three-year highs. Prices of iron ore and coke, key ingredients in steel-making, jumped with Dalian iron ore futures, [DCIOcv1] rising 2.5 percent to a 2-1/2 week high while coke for January delivery [DCJcv1] gained 1.6 percent. [MET/L]
Oil prices also jumped, pushed up as Iraqi forces entered the oil city of Kirkuk, taking territory from Kurdish fighters.
U.S. crude CLc1 rose 1.3 percent to $52.12 a barrel, not far from $52.85 touched late last month – a level not seen since April. Brent crude LCOc1 climbed 1.5 percent to $58.03 per barrel.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS gained for a fifth day running to its highest level since late 2007. [.N]
Japan’s Nikkei .N225 climbed for a sixth day to a level not seen since November 1996. Australian shares extended their winning streak to a fourth straight session to rise 0.6 percent, while South Korea’s stock index .KS11 set a new record. Wall Street was set to open higher. ESc1
Upbeat data from China came before the Communist Party Congress on Wednesday and third-quarter economic data on Thursday. Figures showed China’s producer prices beat market expectations to rise 6.9 percent in September from a year earlier.
“What has helped risk appetite this morning is that the Chinese inflation data suggests the world’s second biggest economy is doing much better than people expected this time a year ago for 2017,” said Michael Hewson, chief markets analyst at CMC Markets.
“When we’ve got palladium prices at their highest levels since 2001, oil prices edging higher, copper edging higher – it’s not doing anything to undermine the perception that the global economy is actually doing fairly ok.”
The IMF last week upgraded its global economic growth forecast for 2017 by 0.1 percentage points to 3.6 percent, and to 3.7 percent for 2018, from its April and July outlook, driven by a pickup in trade, investment, and consumer confidence.
Forecasts for the euro zone, Japan, China, emerging market Europe and Russia were all revised upwards.