SYDNEY -- Stocks headed toward a fresh all-time high as economic momentum in China boosted optimism for global growth.
The MSCI All Country World Index was higher for a seventh day after data showed China’s economy maintained its momentum last quarter, enhancing the allure of stocks after soft US consumer price data reinforced the need for gradual policy tightening from American central bankers. The Shanghai Composite Index pared an earlier slide triggered by concern that policies to reduce leverage in Asia’s biggest economy will curb earnings. The kiwi sank after the deputy governor of New Zealand’s central bank said a lower currency would help rebalance growth.
Data showed Asia’s largest economy expanded 6.9% in the second quarter from a year earlier, matching the previous period and exceeding the 6.8% median estimate in a Bloomberg survey. That comes fresh on the heels of weak US retail sales and inflation figures. Earnings season ramps up this week with Microsoft Corp. and Unilever among those scheduled to report results.
“All numbers suggest that the economy has stabilized” in China, said Liu Li-Gang, chief China economist at Citigroup Inc., in a Bloomberg TV interview.
South Korea’s Kospi index is also heading for a fresh all-time high. Futures on the UK’s FTSE 100 Index indicated gains at the start of London equity trading. Markets are closed in Japan for a holiday. The US dollar remained close to the lowest since September, with speculators holding on to the most bearish positions on the greenback since 2013.
Concern around the implications of a closed-door meeting in China over the weekend weakened small-cap shares. China Chinese President Xi Jinping said the central bank will play a stronger role in defending against risks, calling for more work on safeguarding the financial system and modernizing its regulatory framework.
On the radar this week:
The European Central Bank meets Thursday and Bloomberg Intelligence expects no change then, and no rate hike before 2019. Reuters cited unidentified officials as saying the bank is keen to keep asset purchases open-ended.
The Bank of Japan is forecast to stand pat at its meeting on Thursday.
Round 2 of Brexit talks get underway in Brussels.
Australia’s central bank releases on Tuesday minutes of its July 4 gathering. Government data on the labour market is due out Thursday.
Here are the main moves in markets:
Stocks
The MSCI Asia Pacific Index advanced 0.2% as of 11:45 a.m. in Singapore, extending last week’s 3.1% surge. South Korea’s Kospi rose 0.4% and Hong Kong’s Hang Seng Index climbed 0.6%. Australia’s S&P/ASX 200 rose 0.1%.
The Shanghai Composite Index lost 0.1%, recouping earlier losses of as much as 2.6%.
Futures on the FTSE 100 Index advanced 0.4% and contracts on the S&P 500 Index were little changed.
Currencies and bonds
The yen slid 0.1% to 112.60 per dollar after climbing 1.2% last week.
The Bloomberg Dollar Spot Index rose 0.1% following its 1.3% slide last week.
Treasury futures were little changed in early trading. The yield on 10-year US notes dropped five basis points last week to 2.33%.
The Aussie slid 0.3% on Monday and the kiwi declined 0.2%.
Commodities
West Texas Intermediate crude advanced 0.2% to $46.64 a barrel, heading for a sixth day of gains.
Gold rose 0.2% to $1,230.92 an ounce.
Copper climbed 0.4% to $5,950 per metric ton to pace gains across the London Metal Exchange.