Tokyo’s Olympic bid success gives Nikkei a boost
LONDON (AP) — Japanese stocks outperformed others Monday after Tokyo’s successful bid to host the 2020 Olympic Games boosted sentiment over the future of the world’s number 3 economy.
Elsewhere, uncertainty over Syria and whether the Federal Reserve will start reducing its monetary stimulus kept sentiment in check despite better-than-expected Chinese trade figures.
Japan’s Nikkei 225 was Monday’s standout though, jumping nearly 2.5 percent to 14,205.23 as traders hoped the Tokyo Olympic Games in 2020 will boost the country’s construction sector, which the government is already targeting as part of its program to kick-start its economy. Figures showing that the Japanese economy grew at an annualized rate of 3.8 percent in the second quarter of the year instead of the previous estimate of 2.6 percent also boosted sentiment.
“Obviously the Olympics won’t come around for another seven years, but preparation begins straight away so the impact on the economy between now and then, for example in the construction sector, will be very welcome,” said Craig Erlam, market analyst at Alpari. “This could bring about additional support the economy, which is already in recovery mode.”
Elsewhere, the mood was far more lackluster amid a dearth of economic news and ongoing uncertainty over a military strike on Syria.
In Europe, The FTSE 100 index of leading British shares was down 0.2 percent at 6,522 while Germany’s DAX was steady at 8,276. The CAC-40 in France was 0.4 percent lower at 4,033.
U.S. stocks were performing moderately better, with the Dow Jones industrial average up 0.2 percent at 14,943 and the broader S&P 500 index up the same rate at 1,658.
As well as monitoring developments over Syria, particularly the return of Congress in the U.S., traders around the world will continue to monitor the U.S. economic releases to gauge whether the Federal Reserve will start to reduce its monetary stimulus this month. Last Friday’s mixed U.S. jobs data failed to clarify the picture of whether the Fed will begin the so-called tapering of its $85 billion worth of monthly asset purchases.
“Still, the economy and labor market appear healthy enough to spur a token reduction in asset purchases on September 18, provided the upcoming data do not disappoint and the Syrian situation does not boil over,” said Sal Guatieri, an analyst at BMO Capital Markets.
Earlier, traders in Asia were also lifted by news that China, the world’s second-largest economy, recorded a bigger-than-expected trade surplus of $28.6 billion in August. That helped the benchmark Shanghai index surge 3.4 percent to 2,212.52. Hong Kong’s Hang Seng added 0.6 percent to end at 22,750.65.
Australian markets were also in focus Monday after a weekend election victory for the country’s first conservative government in six years. Prime Minister-elect Tony Abbott has pledged to repeal a 30 percent tax on coal and iron ore miners’ profits, which could help commodities companies. Mining shares outperformed the index, with BHP Billiton up 1.4 percent in Sydney, and Rio Tinto 1 percent higher. Overall though, the stock market advance was modest as the victory was widely expected, with Australia’s S&P/ASX 200 rising 0.7 percent to 5,181.50.
Trading in other financial markets was also fairly subdued.
In oil markets, the benchmark New York crude price was down 29 cents at $110.24 per barrel in electronic trading on the New York Mercantile Exchange. In currencies, the euro rose 0.4 percent to $1.3217, while the dollar fell 0.2 percent to 99.50 yen.
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