# World shares rally as China offers markets a hand Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-08-28 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: China Boosts Markets with New Stimulus Measures Meta Description: Discover how China's latest measures to aid struggling markets impact global stocks. Get insights on upcoming economic data influencing central URL: https://financedigest.com/world-shares-rally-as-china-offers-markets-a-handhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-08-28t002514z1lynxmpej7r009rtroptp4global-markets-1736813634501-compressed.jpg) # World shares rally as China offers markets a hand By Nell Mackenzie and Amanda Cooper LONDON (Reuters) -U.S. [stocks](https://www.financedigest.com/mutual-funds-vs-stocks-which-is-better.html "stocks") were set to open higher on Monday after China announced measures to support its ailing markets, but markets remained cautious ahead of economic data expected later in the week due to determine central bankers’ next steps. Beijing on Sunday said it would halve the stamp duty on stock trading, in its latest move to [boost the struggling market](https://www.financedigest.com/structured-cabling-market-growth-of-it-telecommunication-industry-to-boost-market.html "Structured Cabling Market – Growth of IT & telecommunication industry to boost market") and following its steps to support housing. [China’s securities regulator](https://www.financedigest.com/china-regulator-says-alibaba-tencent-have-submitted-app-algorithm-details.html "China regulator says Alibaba, Tencent have submitted app algorithm details") also approved the launch of 37 retail funds. S&P 500 futures edged up 0.1% while Nasdaq futures rose 0.2%, indicating last [week’s modest rise](https://www.financedigest.com/britains-tesco-increases-dominance-with-12-week-sales-rise-nielseniq.html "Britain’s Tesco increases dominance with 12-week sales rise – NielsenIQ") may continue. World [shares were up 0.3% in European](https://www.financedigest.com/european-shares-kick-off-november-on-bright-note.html "European shares kick off November on bright note") trading. [European stocks](https://www.financedigest.com/european-stocks-slip-on-dour-german-sentiment-survey-ahead-of-powell-speech.html "European stocks slip on dour German sentiment survey ahead of Powell speech"), led by technology shares and China-exposed automakers, also rose. The pan-European [stock index had climbed](https://www.financedigest.com/stocks-climb-yields-fall-with-dollar-on-inflation-data.html "Stocks climb, yields fall with dollar on inflation data") 0.6%. The FTSE was closed for a holiday. The help was needed given [profits at China’s industrial firms fell 6.7% in July](https://www.financedigest.com/china-july-industrial-profits-down-as-covid-curbs-heatwaves-hit.html "China July industrial profits down as COVID curbs, heatwaves hit") from a year earlier, extending this year’s slump to a seventh month. In addition, China Evergrande Group lost as much as 80% of its [market value on Monday after its shares](https://www.financedigest.com/rare-neurodegenerative-disease-treatment-market-value-share-supply-demand-share-and-value-chain-2021-2031.html "Rare Neurodegenerative Disease Treatment Market Value Share, Supply Demand, share and Value Chain 2021-2031") resumed trading – a key step for the world’s most indebted property firm as it seeks to restructure its offshore debt. Foreign investors continued to flee from Chinese stocks, offloading a net 8 billion yuan ($1.10 billion), according to data from the [Hong Kong](https://www.financedigest.com/luxury-yacht-owned-by-sanctioned-russian-oligarch-docked-in-hong-kong.html "Luxury yacht owned by sanctioned Russian oligarch docked in Hong Kong") Stock Exchange. The Chinese [blue chip](https://www.financedigest.com/siemens-energy-to-rejoin-germanys-blue-chip-dax-hellofresh-to-exit.html "Siemens Energy to rejoin Germany’s blue-chip DAX, HelloFresh to exit") stock index and the Shanghai Composite closed higher. “If everything was rosy there would be no need for a stimulus,” said Florian Ielpo, head of macro at Lombard Odier Investment Managers. Unlike the bulk-sized packages announced in previous years, the latest [measures represented a shift from the Chinese government](https://www.financedigest.com/factbox-government-measures-to-ease-inflation-pain.html "Factbox: Government measures to ease inflation pain") to try and tactically lift the market mood where it saw fit, said Ielpo. [Traders are now awaiting](https://www.financedigest.com/dollar-stands-firm-while-traders-await-cpi.html "Dollar stands firm while traders await CPI") official PMI data for August due out from Thursday, which is still expected to show activity is in the red. The [market did manage](https://www.financedigest.com/tinnitus-management-market-to-top-us-3-2-bn-driven-by-growing-burden-of-hearing-disorders-fmi.html "Tinnitus Management Market to Top US$ 3.2 Bn Driven by Growing Burden of Hearing Disorders: FMI") to weather a slightly hawkish outlook from Federal Reserve chair Jerome Powell, who reiterated they might have to raise rates again but promised to move “carefully. The impression from the [Fed has now become 50 shades of hawkish](https://www.financedigest.com/world-equities-fall-u-s-treasury-yields-rise-after-hawkish-fed.html "World equities fall, U.S. Treasury yields rise after hawkish Fed"). We [know rates](https://www.financedigest.com/must-know-facts-about-the-protection-class-rating-on-your-home.html "Must-Know Facts about the Protection Class Rating on Your Home") will remain above 5% but the question remains for how long and how much higher?” said Lombard Odier’s Ielpo. Futures imply around an 80% chance of no change at the Sept. 20 meeting, but a 58% probability of a hike by [year end](https://www.financedigest.com/russian-stocks-to-pare-some-heavy-losses-by-year-end-reuters-poll.html "Russian stocks to pare some heavy losses by year-end – Reuters poll"). “This means tricky weeks ahead for risk assets. Economic data has yet to digest the full transmission of past [rate hikes,”](https://www.financedigest.com/ecb-to-go-big-again-on-oct-27-with-75-bps-rate-hike-reuters-poll.html "ECB to go big again on Oct. 27 with 75 bps rate hike: Reuters poll") said a research note on Monday from Generali. But the uncomfortable message from Jackson Hole may mean a protracted [higher inflation than market](https://www.financedigest.com/us-futures-inch-up-stock-markets-ride-higher-on-cooler-inflation.html "US futures inch up; stock markets ride higher on cooler inflation") bulls might have hoped, said the note. ## DOWNSIDE RISK ON JOBS Much will depend on the flow of U.S. data, including this week’s ISM survey on manufacturing, along with reports on payrolls, core inflation and [consumer spending](https://www.financedigest.com/the-impact-of-consumer-spending-on-the-market-2.html "The Impact of Consumer Spending on the Market"). Median forecasts are for payrolls to rise 170,000 in August with a steady [jobless rate](https://www.financedigest.com/russia-jobless-rate-stays-at-record-low-of-3-9-in-july.html "Russia jobless rate stays at record low of 3.9% in July") of 3.5%. JPMorgan analysts cautioned that [job gains](https://www.financedigest.com/dollar-jumps-as-u-s-job-gains-wage-growth-beat-expectations.html "Dollar jumps as U.S. job gains, wage growth beat expectations") could be depressed by the entertainment industry strike in Hollywood and are tipping an increase of just 125,000. Figures on European Union inflation this week may also be instrumental in whether the European [Central Bank](https://www.financedigest.com/irish-central-bank-eases-strict-mortgage-lending-limits.html "Irish central bank eases strict mortgage-lending limits") (ECB) decides to hike next month. The market is evenly split on whether there will be another rise in the 3.75% rate, with [ECB President Christine Lagarde](https://www.financedigest.com/ecbs-lagarde-raises-prospect-of-rate-hikes-beyond-neutral-level.html "ECB’s Lagarde raises prospect of rate hikes beyond neutral level") on Friday emphasising that policy needed to be restrictive. This was a common theme among Western central banks, with [Bank of England Deputy Governor Ben Broadbent saying](https://www.financedigest.com/bank-of-england-says-britain-is-coping-with-higher-interest-rates.html "Bank of England says Britain is coping with higher interest rates") at the weekend that rates might have to stay high “for some time yet. Odd man out, [Bank of Japan](https://www.financedigest.com/dollar-hits-20-yr-high-as-yen-tumbles-on-dovish-bank-of-japan.html "Dollar hits 20-yr high as yen tumbles on dovish Bank of Japan") Governor Kazuo Ueda, on Friday reiterated the need for policy to stay super loose. That divergence kept the [yen under pressure and early Monday the dollar was firm](https://www.financedigest.com/aussie-dollar-firm-as-bonds-tumble-yen-looks-past-boj.html "Aussie dollar firm as bonds tumble, yen looks past BOJ") at 146.50, within a whisker of Friday’s near 10-month top of 146.64. The [dollar slipped](https://www.financedigest.com/dollar-slips-before-expected-fed-rate-hike.html "Dollar slips before expected Fed rate hike") from its multi-week high to $104.09 against a basket of currencies. Yields on U.S. two-year notes fell slightly 0.1% after touching their [highest since](https://www.financedigest.com/russian-inflation-accelerates-to-7-61-m-m-in-march-highest-since-1999.html "Russian inflation accelerates to 7.61% m/m in March, highest since 1999") early July on Friday. High yields and a relatively strong dollar have been a headwind for gold which was idling at $1,915 an ounce. \[GOL/\] [Oil prices](https://www.financedigest.com/oil-prices-ease-to-trade-near-2-month-lows-on-china-demand-fears-dollar-strength.html "Oil prices ease to trade near 2-month lows on China demand fears, dollar strength") drew some support from the storm developing in the Gulf of Mexico and China support. \[O/R\] Brent rose 31 cents to $84.17 a barrel, while U.S. crude rose 15 cents to $79.68 per barrel. (Reporting by Nell Mackenzie and Amanda Cooper; Editing by Stephen Coates and Hugh Lawson) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---