China stocks jump to 3-year high as disappointing export data fuels stimulus hopes

HONG KONG – Chinese stocks surged to their highest level in more than three years Monday after disappointing exports raised investor hopes of more stimulus. Other Asian markets mostly posted modest gains while European stocks fell.

KEEPING SCORE: European stocks were lower in early trading, with France’s CAC 40 losing 0.4 per cent to 4,399.72. Germany’s DAX slipped 0.3 per cent to 10,052.967 Britain’s FTSE 100 fell 0.4 per cent to 6,715.79. U.S. stocks were poised to open lower, with Dow futures down 0.2 per cent to 17.922.00. Broader S&P 500 futures lost 0.2 per cent to 2,072.10.

CHINA TRADE: Export growth slumped last month and imports unexpectedly contracted in the latest sign of weakness in the world’s No. 2 economy. Chinese stocks, however, jumped following the data, a sign that investors expect the government to dole out more stimulus.

THE QUOTE: “There is an expectation of more easing to come” after China’s central bank unexpectedly cut interest rates two weeks ago, said Michael Every, head of Asia Pacific financial research at Rabobank. “For China it’s ‘Welcome to the new normal,’ which is inappropriately lax monetary policy juicing equity markets.”

JAPAN ECONOMY: Japan’s economy contracted more than initially estimated in the third quarter, according to revised data, confirming a recession as the country prepares to go to the polls. The world’s No. 3 economy shrank 1.9 per cent in the July-September period and voters will be deciding this weekend whether to give Prime Minister Shinzo Abe more time for his monetary easing and other stimulus policies to work. Polls suggest Abe’s ruling Liberal Democratic Party will retain its parliamentary majority.

US JOBS: Data showed U.S. employers added 321,000 jobs last month in the biggest burst of hiring in nearly three years. Unemployment held steady at 5.8 per cent. It’s the latest round of upbeat data on the world’s biggest economy that reinforces expectations that the Federal Reserve will raise interest rates next year.

ASIA’S DAY: Japan’s benchmark Nikkei 225 edged up 0.1 per cent to close at 17,935.64. South Korea’s Kospi dipped 0.4 per cent to 1,978.95 while Hong Kong’s Hang Seng gained 0.2 per cent to 24,047.67. The Shanghai Composite in mainland China broke through the psychological 3,000 barrier, soaring 2.8 per cent to 3,020.26, a level it hasn’t closed at since April 2011. The index is up 25 per cent in the past month. Australia’s S&P/ASX 200 advanced 0.7 per cent to 5,372.70.

CURRENCIES: The dollar slipped to 121.33 yen from 121.50 yen in late trading Friday. The euro fell to $1.2254 from $1.2286.

ENERGY: Benchmark U.S. crude was down 63 cents to $65.21 in electronic trading on the New York Mercantile Exchange. The contract fell 97 cents to close at $65.84 a barrel on Friday. Brent crude, used to price oil sold on international markets, dropped 98 cents to $68.05.