Asian shares extend gains as investor fears ease

Asian shares extend gains as investor fears ease

European shares were also expected to build on Monday's strong start, with spreadbetters seeing both Germany's DAX and France's CAC 40 rising up to 0.7 percent and Britain's FTSE 0.4 percent. Asian shares extended gains on Tuesday as a combination of stabilising Chinese markets, rebounding oil prices and solid US consumption data prompted investors to look for bargains after last week's rout. European shares were also expected to build on Monday's strong start, with spreadbetters seeing both Germany's DAX and France's CAC 40 rising up to 0.7 percent and Britain's FTSE 0.4 percent. S&P futures rose 1.7 percent, pointing to a firmer opening as well for US markets, which were shut on Monday for a holiday. MSCI's broadest index of Asia-Pacific shares outside Japan gained 1.1 percent, with mainland China shares advancing 2.7 percent to three-week highs, helped by a surge in China's bank lending to a record high. "Before the start of the Lunar New Year, there were worries about Chinese shares and a possible further fall in the yuan. But since the resumption of trading on Monday, Chinese markets have been surprisingly steady," said Koichi Yoshikawa, executive director of financial markets at Standard Chartered Bank. Japan's Nikkei rose 0.2 percent after a 7.2 percent climb on Monday, recovering a sizable part of its 11 percent slump last week - its biggest since 2008. "It is partly a reaction after such big falls last week. Solid US data is also improving investor sentiment given that they are counting on US growth to lead the global economy," said Hirokazu Kabeya, chief global strategist at Daiwa Securities. Concerns over the health of European banks, the pain of cheap oil prices on energy producers and worries about slowdowns in the US and Chinese economies pushed the world's share prices to 2-1/2-year lows last week. But US retail sales data on Friday showing firm growth allayed some fears - at least for now - that the US economy could be dragged into recession as growth stumbles in many parts of the world. Sentiment on the US currency also improved, with the dollar rising to 114.65 yen, recovering further from a 15-month low of 110.985 touched on Thursday. The euro also eased to as low as USD 1.1128 on Monday, retreating from Thursday's 3 1/2-month high of USD 1.1377, and last stood at USD 1.1173. The common currency was also driven lower by remarks from European Central Bank President Mario Draghi that the bank is ready to ease policy further in March. Gold extended fall from Thursday's one-year peak of USD 1,262.90 per ounce as safe-haven buying in the precious metal in recent weeks was rolled back. It fell 0.6 percent to USD 1,203.90, unable to find a floor after 2.2 percent on Monday, which was its biggest fall in almost seven months. Oil prices soared as news that top officials from the world's biggest oil producers --Saudi Arabia, Russia, Venezuela and Qatar -- spurred speculation of an eventual deal to tackle a massive supply glut. "As much as we continue to believe that this is yet another meeting that would yield nothing, the markets remain wary of any sudden agreement that major oil producers could come to," said Daniel Ang, an analyst at Phillip Futures in Singapore. Global benchmark Brent futures rose 4.1 percent to USD 34.76 a barrel, their highest level in a week. US crude futures gained 4.4 percent to USD 30.72. As risk sentiment improved, yields on top-rated government bond rose, with the 10-year US Treasuries yield rising 3.5 basis points to 1.781 percent from 1.746 percent at the end of last week. Japanese bond yields fell, however, as the Bank of Japan started implementing negative interest rates on Tuesday, with the 10-year yield dropping 4.5 basis points to 0.040 percent. The benchmark overnight interbank lending rate fell to zero percent but not to negative levels partly because some banks have not fixed their system to deal with negative rates.

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Shares in Asia gain further as sentiment improves Shares Shares in Tokyo gained smartly in Asia on Tuesday, joined by Sydney and Shanghai as sentiment improved following recent sharp volatility in global markets. The Nikkei 225 rose 1.70%, while the Shanghai Composite gained 2.83% and the S&P/ASX 200 rose 0.82%. Earlier, the Reserve Bank of Australia said it sees domestic conditions on balance as positive, though it continues to keep a close eye on the economic wobbles in China, according to the minutes of its Feb. 2 board meeting released Tuesday. At the meeting, the RBA held rates at a record low 2%. U.S. markets were closed on Monday. Ahead, market players will be turning their attention to Wednesday's minutes of the Fed's latest policy meeting for fresh indications on whether the U.S. central bank will raise interest rates at all this year.

Read more at: http://www.moneycontrol.com/news/international-markets/shares-in-asia-gain-further-as-sentiment-improves_5495641.html?utm_source=ref_article

even though asian markets are rising sri lanka stock market will be stuck neutral or will go downhill until we control our interest rate pressure. Money Market liquidity is drying, overnight rates is rising every freaking day. last Tuesday overnight rate was at 6.00-6.10% range, now 6.60-6.75% range.

http://www.economynext.com/Sri_Lanka_banks_raise_deposit_rates_200bp-3-4265-17.html

Few years ago 15% for 1 year deposit that time also market was ASI more than 7000+

Nothing affect it will be good ,no need to worry about market , market will recover soon

Few yrs ago we knew what happen to the market after when it peaked to 7000+