|
 An at times dramatic sell-off over the past week in Shanghai,
where stocks are still up almost 50 percent this year, has again
focused global attention on financial risks in the world's second
largest economy.
Analysts and traders said Monday's surge - which came after a
handful of lukewarm sentiment surveys that said little positive
about the outlook for the economy - showed the market was being
driven by speculators rather than economic data.
"The pattern in a bull market is that immediately after a plunge,
money will pile in, pushing the market higher," said Wang Yu,
analyst at Pacific Securities Co in Beijing.
"To many investors, the rout last week means a huge reduction in
market risks, creating new buying opportunities."
 The CSI300 index <.CSI300> of the largest listed companies in
Shanghai and Shenzhen rose 4.9 percent, its biggest one-day rise
since December 2012.
The FTSE Eurofirst index of 300 leading European companies was up
0.6 percent, reflecting gains in all of its major markets. MSCI's
broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS>
was a touch lower after earlier dropping to its lowest intraday
level since April 7.
Major state-backed Chinese newspapers carried front-page articles
saying that despite the tumbles last week the foundations of the
bull market remain unchanged.
China's official manufacturing Purchasing Managers' Index (PMI)
edged up to 50.2 from April's 50.1, matching the expectations of
economists polled by Reuters but also suggesting Beijing might have
to take additional steps to spur growth.
Separately, the HSBC/Markit PMI came in at 49.2 in May, down for a
third month and below the 50-point level that separates an expansion
from a contraction in activity. The private survey showed export
orders contracted at the sharpest rate in nearly two years.
[to top of second column] |
Much attention in Europe was again focused on Greece. The euro has
proved relatively robust through a period of unsettling talks
between Athens and its creditors, but was down 0.7 percent on Monday
at $1.0915. <EUR=EBS>
That may be as much a reflection of another round of dollar strength
over the past 10 days, although the U.S. currency was largely
unchanged against the yen <JPY=EBS> and only 0.2 percent higher
against sterling. <GBP=D4>
Greek and euro zone officials agreed on the need to reach a
cash-for-reforms deal quickly as Athens missed a self-imposed Sunday
deadline for reaching an agreement to unlock aid.
"It's difficult to quantify how much the currency market has
factored in the possibility of Greece missing the June 5 (IMF loan)
repayment deadline," said Shinichiro Kadota, chief Japan forex
strategist at Barclays in Tokyo.
"Greek debt yields provide only a rough guide, and although a missed
deadline will not spell default, market concern remains high."
Oil prices dipped about 0.7 percent to $65.12.
(Additional reporting by Smauel Shen and Pete Sweeney in Shanghai;
editing by John Stonestreet)
[© 2015 Thomson Reuters. All rights
reserved.]
Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
