LONDON – The latest on the turmoil in global financial markets (all times local):
Gold has lost some of its recent shine as stocks have piled on gains.
That’s not an unusual development. Gold has surged in recent weeks as stock markets around the world have fallen sharply on concerns over the state of the global economy. Gold is widely considered the ultimate safe haven for investors to park their cash in times of volatility.
On Monday, as stocks surged, gold was down 2.4 per cent at $1,209 an ounce.
Hopes that the fall in the Chinese currency may have run its course have helped stock markets around the world start the week on a positive note.
The main reason behind the volatility in financial markets this year has been uncertainty over the economic future of China, the world’s number 2 economy. One of the triggers behind that uncertainty centred on China’s currency, which has been weakening steadily over months.
People’s Bank of China Governor Zhou Xiaochuan appears to be trying to ease that pressure. In an interview with the Caixin magazine published over the weekend, he said there was no basis for a further depreciation of the yuan. That’s provided some relief to the country’s exporting neighbours, who have worried about their competitiveness.
That relief was evident in the 7 per cent spike in Japan’s main stock market. Other markets in Asia bounced too, including the Hang Seng in Hong Kong, which ended the session 3.3 per cent higher.
European stock markets are registering big gains at the start of the trading week, flying in the slipstream of a massive 7 per cent increase in Japan’s Nikkei index.
In early trading, all Europe’s stock markets are trading sharply higher with the Stoxx 600 index up 2.9 per cent at 321.30.
The buoyant tone in global stock markets was set earlier during Asian trading hours, when soft Japanese economic growth figures stoked talk of further stimulus by the country’s economic authorities.
That weakened the Japanese yen to the likely relief of the country’s exporters — the dollar is up 0.6 per cent at 113.90 yen. The yen’s weakness was one of the reasons why the Nikkei ended 7.2 per cent higher at 16,022.58.
Markets have had a rocky start to the year as fears have grown over the state of the global economy.