Oil, stimulus hopes, yuan boost global stocks
HONG KONG - World stock markets were mostly higher Tuesday as a strengthening yuan and hopes for more central bank stimulus gave investors relief from the mauling that markets have suffered so far this year.
Also, a tentative offer by Russia, Saudi Arabia, Qatar and Venezuela to freeze oil production at January levels gave oil prices a boost. The offer would only take effect if other oil producing countries followed suit, Russia's energy ministry Alexander Novak said following a meeting in Qatar.
European stocks were higher in early trading. France's CAC 40 climbed 0.4 percent to 4,131.18 and Britain's FTSE 100 added 0.2 percent to 5,831.64. Germany's DAX dipped 0.3 percent to 9,181.45.
U.S. benchmarks were poised to open sharply higher after a long weekend. Both Dow and broader S&P 500 futures jumped 1.4 percent.
Investor sentiment remained positive that central banks would continue to ease monetary policy thanks to comments from the head of the European Central Bank. With the ECB set to discuss policy measures on March 10, Mario Draghi told the European Parliament on Monday that the bank has a range of instruments it can deploy if it decides more stimulus is needed. Earlier, a disappointing report on Japanese economic growth also raised hopes for more policy easing.
China's strengthening currency also helped boost sentiment. The yuan hovered near its strongest level so far this year a day after the central bank guided the currency, also known as the renminbi, sharply higher. Previous weakness in the yuan triggered worries the Chinese economy was in worse shape than thought. Meanwhile, new yuan loans jumped 71 percent in January, the official Xinhua news agency reported Tuesday, suggesting solid demand in the world's No. 2 economy.
"Since the start of January everything went south and we really needed some positive news," said Jackson Wong, associate director at Huarong International Securities. "Factors that were affecting the markets negatively have turned positive now: the yen is weaker, the renminbi is stronger, global markets like the U.S. are stabilizing. All the negative catalysts from January are turning better."
Japan's Nikkei 225 added 0.2 percent to close at 16,054.43 after soaring 7.2 percent the day before, which was its biggest daily gain since September. South Korea's Kospi rose 1.4 percent to 1,888.30 and Hong Kong's Hang Seng advanced 1.1 percent to 19,122.08. The Shanghai Composite Index in mainland China surged 3.3 percent to 2,836.57 and Australia's S&P/ASX 200 was up 1.4 percent to 4,910.00. Benchmarks in Taiwan and most of Southeast Asia also rose.
The dollar eased to 114.06 yen from 114.54 yen in Monday's trading. The euro edged up to $1.1174 from $1.1168.