Indications are that a degree of normality seems to be creeping back into global equity markets as positive trade data emerged from Germany, stronger than expected, as well as signs that the Chinese economy might be awakening from its slumber.
Investors reacted favorably to the moderately good news as the vast majority of global markets recorded gains. A quick whip around showed the S&P 500 index (SPX, +2.51%) up 2.51% while on the other side of the Atlantic, the FTSE 100 (UKX, +1.18%) was up 1.16%, while the German DAX (DAX, +1.61%) was up by 1.58%, all at close of business on Tuesday.
Asian markets continued the upward trend during late afternoon trade on Wednesday (Asian time zones). The Shanghai Composite Index (SHCOMP, +1.55%) was up 1.69%, while the Hang Seng (HSI, + 2.97%) increased by 2.97% and the Nikkei (NKY, +5.53%) by 5.79%, an hour before close of trade.
The initial impetus for the change in investor sentiment came from the German Statistics Office who reported that the country’s trade surplus had reached a record high of 22.8 billion euros or $25.6 billion. This figure exceeded the consensus forecast of 22.3 billion euros from economists polled in a Wall Street Journal survey.
The market received an additional fillip with the news of an increase in the second quarter Eurozone GDP of 0.4% over the previous quarter on the back of exports that increased by 1.5% over the initial estimate of 1.2%.
On the Chinese front, the latest data showed that imports for August had decreased by 13.8% in U.S. dollar terms year to date which was higher than the July figure of an 8.1% drop. Exports, on the other hand, decreased by 5.5% for August, showing an improvement on the drop of 8.1% recorded for July.
Commenting on the Chinese export data, Richard Perry, market analyst at Hantec Markets said in a note, “Last month, the disappointing export data created a massive shift towards safe-haven plays so perhaps with the exports in ahead of expectations, the market is a touch more relaxed this time around. Traders seem to be looking on the brighter side of the Chinese trade data.”