Scalper1 News
The Asian stock market rallied offering some respite to investors suffering from the global economic slowdown triggered by uneasiness in China. Thanks largely go to the optimistic remarks made by the Japanese Prime Minister Shinzo Abe and China’s Ministry of Finance regarding strong stimulus measures that would stir up their economies. Abe revealed plans to cut the corporate tax rate in 2016 by at least 3.3 percentage points to attract investors into the country. This led the Nikkei index at the Tokyo Stock Exchange to rise 7.7% in the afternoon trading session on Wednesday, the biggest one-day gain since October 2008. Notably, the index shed 2.4% in the previous trading session. China’s Ministry of Finance also boosted investor confidence after it promised to reform the tax system, step up investor spending and utilize the public-private-partnership model to support economic growth. Soon after this announcement, the Shanghai Composite Index rose 2.3% while Hong Kong’s Hang Seng Index moved up 4.1% Wednesday. This extended the continued rebound from Tuesday, when both the Shanghai and Hong Kong indexes gained 2.9% and 3.3%, respectively. The rebound in the Asian market was also supported by a strong rally in the Wall Street and European indexes Tuesday. The U.S. markets recovered from its second-worst week of the year with Dow Jones, S&P 500 and Nasdaq moving up 2.4%, 2.5% and 2.8%, respectively. Meanwhile, Germany’s benchmark DAX index ended up 1.6% higher and London’s FTSE 100 index closed 1.2% higher, driven by promising import and export data from Germany. The top U.S. equities ETFs, SPDR S&P 500 ETF (NYSEARCA: SPY ), Dow Jones Industrial Average ETF (NYSEARCA: DIA ) and PowerShares QQQ Trust (NASDAQ: QQQ ), deserve special mention as they’ve captured the rebound in the global market. Tuesday, SPY, DIA and QQQ gained a respective 2.5%, 2.4% and 2.8% after losing 1.6%, 1.6% and 1.2%, respectively, in the previous trading session. Some of the Asia-Pacific ETFs that can continue its rally from Tuesday riding on the recent upbeat data are iShares MSCI Taiwan (NYSEARCA: EWT ), iShares MSCI South Korea Capped (NYSEARCA: EWY ), Vanguard FTSE Pacific ETF (NYSEARCA: VPL ) and iShares MSCI All Country Asia ex Japan (NASDAQ: AAXJ ). Tuesday, EWT gained 3.2%, EWY rose 2.5%, VPL went up 2.9% and AAXJ moved up 4%, after posting losses in the prior session. All these ETFs have a decent Zacks Rank of 3 or ‘Hold’ rating with a Medium risk outlook. Despite the gains, investors should be a little cautious about the rebound in the global markets given the underlying weakness in China. The U.S. Federal Reserve’s move regarding short-term interest rates in its next week’s meeting also poses questions regarding the overall health of the market. Original Post Scalper1 News
Scalper1 News