China stocks jump on stimulus hopes
HONG KONG - Chinese stocks jumped Monday as grim trade figures raised expectations that Beijing would step up stimulus measures. Other global stock benchmarks were mostly lower.
European markets opened weaker. Britain's FTSE 100 edged down 0.1 percent to 6,798.04 and Germany's DAX dropped 0.5 percent to 11,145.23. France's CAC 40 fell 0.6 percent to 4,891.89. Futures augured a tepid start for Wall Street. S&P 500 futures were down 0.1 percent. Dow futures were unchanged.
Chinese exports contracted 2.8 percent from a year earlier in May while imports shrank 18.1 percent, the latest sign of a sputtering growth in the world's No. 2 economy. For the first five months of the year, total imports and exports fell 7.8 percent, customs data showed. China's economy expanded 7 percent in the first quarter, the slowest quarterly growth since the global financial crisis in 2008. The latest data adds to pressure on Beijing to avoid a sharp slump.
"The less it looks like China's economy is picking up, the more likely it is that Beijing will push through further stimulus into the economy," Mizuho Bank said in a commentary.
Japan's Nikkei 225 closed less than 0.1 percent lower at 20,457.19 and South Korea's Kospi slipped 0.1 percent to 2,065.19. Hong Kong's Hang Seng rose 0.2 percent to 27,316.28. The Shanghai Composite Index in China jumped 2.2 percent to 5,131.88, boosted by hopes for more economic stimulus. Southeast Asian benchmarks were lower. Australia's stock market was closed for a holiday.
The Cabinet Office said the economy grew 3.9 percent in the January-March quarter, faster than the 2.4 percent initially estimated. However, the picture may not be as rosy as the headline number suggests. Analysts expect growth in the second quarter to slow sharply as consumer spending slows and industrial output wanes.
Benchmark U.S. crude oil dropped 39 cents to $58.74 a barrel in electronic trading on the New York Mercantile Exchange following OPEC's decision to keep its oil output target on hold. The contract rose $1.13 to close at $59.13 a barrel on Friday. Brent crude, a benchmark for international oil used by many U.S. refineries, fell 15 cents to $63.16 per barrel in London.
The dollar slipped to 125.27 yen from 125.61 yen on Friday. The euro strengthened to $1.1125 from $1.1113.