European stocks higher as German gloom fuels ECB hopes

Frankfurt rose 0.7 and Paris added 0.6 percent following news that German industrial orders fell in August. (Reuters)
Updated 07 October 2019

European stocks higher as German gloom fuels ECB hopes

  • New contracts in Germany were down 0.6 percent compared with July

LONDON: Europe’s stock markets pushed higher Monday as investors bet that gloomy German economic data would help persuade the European Central Bank to continue its “accommodative” monetary policy, dealers said.
Frankfurt rose 0.7 and Paris added 0.6 percent following news that German industrial orders fell in August.
New contracts in Germany were down 0.6 percent compared with July, federal statistics authority Destatis said, disappointing analysts’ predictions for a 0.6-percent increase.
London stocks climbed 0.6 percent.
The bright performance at the start of the week followed strong gains in Wall Street action on Friday.
“We are in a... scenario where bad news is good news,” ThinkMarkets analyst Naeem Aslam told AFP.
“Any weakness in the economic numbers, which we experienced today, confirms that the European Central Bank is going to remain accommodative and this helps investors to favor riskier assets” such as stocks.
Most markets also rose in Asia after a mixed US jobs report eased worries about a recession in the world’s top economy — and maintained expectations the Federal Reserve will press on with interest rate cuts.
However, there was some nervousness after reports said China had cut back on the number of areas it is willing to discuss at this week’s top-level trade talks with the US, rekindling concerns about the chances of any agreement between the two.
After a string of below-par data last week that highlighted the impact of Donald Trump’s trade war on the key manufacturing and services sectors, Friday’s much-anticipated non-farm payrolls figures showed unemployment at a 50-year low in September.
But the pace of job creation was the slowest in four months, wages fell and the manufacturing workforce also shrank for the second time this year.
Focus turns this week to the resumption of high-level trade talks between China and the United States in Washington.
However, while there has been a broad expectation the two sides are coming together in some areas owing to their economies stuttering, reports said Beijing was looking to narrow the remit of any deal.
Bloomberg News reported that top negotiator Vice Premier Liu He said he would not put on the table reforms to Chinese industrial policy or government subsidies, a key source of anger within the White House.
“Thursday’s US-China trade talks will be in play this week, but already traders are managing their expectations as it seems that China won’t budge on certain issues,” said market analyst David Madden at CMC Markets UK.
Wall Street stocks were mixed in late morning trading, with the Dow slipping less than 0.1 percent.
Oil prices meanwhile rebounded sharply from last week’s heavy losses as bargain hunters moved in.
“The oil market... is trading positive today after suffering from heavy losses last week,” said ThinkMarkets’ Aslam.
“It was the string of dismal economic numbers that sparked the (oil market) sell-off because traders became concerned about global growth.”


Malaysia to study impact of India’s planned trade action

A truck carrying oil palm fruits passes through Felda Sahabat plantation in Lahad Datu in Malaysia's state of Sabah on Borneo island, February 20, 2013. (REUTERS)
Updated 14 October 2019

Malaysia to study impact of India’s planned trade action

  • Malaysia’s key imports from India include petroleum products, live animals and meats, metals, chemicals and chemical products

KUALA LUMPUR: Malaysia’s Prime Minister Mahathir Mohamad said his government will monitor the trade situation with India, which is reported to be considering trade curbs on the Southeast Asian nation over his criticism of actions in Kashmir, news wire Bernama reported.
Government and industry sources told Reuters last week that New Delhi is looking for ways to limit palm oil imports and other goods from Malaysia, in retaliation for Mahathir’s speech at the United Nations in September when he said India had “invaded and occupied” Jammu and Kashmir. Malaysia had said it did not receive “anything official” from India.
Mahathir said on Sunday his government will “study the impact of the action taken by India,” the government-owned Bernama said.
“They are exporting goods to Malaysia too. It’s not just one-way trade, it’s two-way trade,” Mahathir was quoted as saying in the report.
India is the world’s biggest importer of edible oils, and is the biggest buyer of Malaysian palm oil. It bought 3.9 million tons of Malaysian palm oil in the first nine months of 2019, according to data compiled by the Malaysian Palm Oil Board.
Malaysia’s key imports from India include petroleum products, live animals and meats, metals, chemicals and chemical products.