The different patterns of the European and Chinese Markets

Monday saw the European shares rise this is even when there was awaken decision by China to resume its easing cycle which is meant to be more than the offset disappointment as the G20 had failed to agree in a meeting on the new measures to boost economic growth. The pan European index had its first highest level since February 2nd with in going up by 0.7 percent. This is despite it having registered losses in three consecutive months which was attributed to investors’ concern over the outlook of the global growth.

The data from the Euro Zone showed that the inflation had turned negative unexpectedly in February therefore helping the market to come off its lows while adding weight to the expectations that the ECB will have a further boost. However this sentiments are weak for the fact that there are worries over growth. The potential gains for the market are limited because of the worries from the investors about economic risks and deflation.

China on the other hand took measures to revive its slowing economy by cutting the amount of cash that banks must hold as reserves commonly known as reserve requirement ratio. The G20 central bankers and finance ministers suggested that there was need to view past the ultra-low interest rates to reinstate the global economy. This is however seen as the G20 had not yet had enough pressure from the markets.

The rate move by China, which is the top consumer of metal saw the metal prices turn higher making the miners be the top sectorial gainers going up by approximately 3.4 percent. British supermarket group Morrisons out performed its sector after striking a deal with the Amazon, an online retailer. This move is seen as a bid to increase volume and to broaden their brand reach.

To sum up it will be interesting to see how Germany’s DAX will gain after falling by 0.2 percent as Tesco fell by 2 percent. All eyes will however turn to Ireland after the two main parties said that they would form their own government in the next ten days after an inconclusive election.


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