A roundup of trading on major world markets:
NEW YORK – Wall Street has done an about turn into negative territory after earlier edging up on China’s move to boost its slowing economy and higher oil prices.
China’s central bank on Monday cut its reserve requirement ratio, or the amount of cash that banks must hold as reserves, for the fifth time in a year.
“It’s sort of like a sugar shock, a bump in near-term growth at the expense of longer-term credibility. I think investors are caught weighing the two,” said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.
US crude prices rose more than three per cent after Saudi Arabia said it would work with other producers to limit oil market volatility.
In afternoon trading, the Dow Jones industrial average was down 104.02 points, or 0.63 per cent, at 16,535.95, the S&P 500 was down 8.10 points, or 0.42 per cent, at 1,939.95 and the Nasdaq Composite index was down 23.93 points, or 0.52 per cent, at 4,566.54.
LONDON – Britain’s top share index has closed in marginally positive territory, as a rally in mining stocks following new stimulus measures from China – the world’s top metals consumer – lent support to the market.
Supermarket retailer WM Morrison, which is outside the top UK equity index, also rose after striking a distribution deal with online retailer Amazon.
The blue-chip FTSE 100 index closed up 1.1 points – flat in percentage terms – at 6,097.09 points. The FTSE also marked its first monthly gain since October.
The FTSE came off its earlier intraday lows after China’s central bank cut the reserve requirement ratio – the amount of cash that banks must hold as reserves – by 50 basis points to help revive a slowing economy.
The latest moves by China to prevent a slowdown in its economy spurred UK mining stocks, given China’s importance in terms of demand for metals. Anglo American rose 6.6 per cent while rival Glencore advanced four per cent.
The G20 group of the world’s top economies failed to come up with a firm plan on Saturday for specific coordinated stimulus spending to boost activity, as some investors had been hoping after markets nosedived at the start of 2016.
“The G20 outcome was disappointing, as there was a lot of talk and not a lot of action, but it’s good to see China still has some ammunition in its warchest to try and spur demand,” said Dafydd Davies, partner at Charles Hanover Investments.
Investors cheered mid-cap Morrison’s supply deal with Amazon, with Morrison rising 5.9 per cent.
“This is good news for the UK’s fourth biggest supermarket as it aims to boost volumes, increase the reach of its brand and implement further self-help in an industry still struggling from fundamental change,” said Mike van Dulken, head of research at Accendo Markets.
However, some analysts said the Amazon/Morrison deal could impact larger rivals such as Tesco, whose shares fell on concerns about the increasing competition.
HONG KONG – Asian shares have retreated after a weekend meeting of G20 finance chiefs ended with no new plan to spur global growth and as investors fretted the US Federal Reserve could raise interest rates before year-end.
The US dollar, however, tumbled against the Japanese yen as investors sought shelter from the fall in equities, which saw Chinese stocks lose nearly three per cent.
G20 finance ministers and central bankers, meeting in Shanghai on Friday and Saturday, agreed to use “all policy tools – monetary, fiscal and structural – individually and collectively” to reach the group’s economic goals.
But there was no plan for co-ordinated stimulus, which some investors had been seeking after concerns about a slowdown in China depressed markets at the beginning of 2016.
MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.6 per cent and appeared likely to post its second consecutive month of losses, with a 1.2 per cent drop in February.
Chinese shares closed at one-month lows. The CSI300 index of the largest listed companies in Shanghai and Shenzhen, closed down 2.5 per cent while the Shanghai Composite index fell 2.9 per cent on concern rising real estate prices would see funds withdrawn from shares.
Tokyo’s Nikkei lost 1 per cent as the yen gained, making life more difficult for Japanese exporters, and on China worries.
WELLINGTON – The S&P/NZX 50 Index gained 5.9 points, or 0.1 per cent, to 6230.88.
