Published : 2013-12-24 20:53
Updated : 2013-12-24 20:53
AMSTERDAM (AP) – Global stocks posted further gains Tuesday as concerns over a cash crunch in China eased. Trading volumes were light in shortened Christmas Eve sessions.
Most markets have been strong in general over the past week following figures showing the U.S. economy is performing better than expected.
The advance has also come despite the Federal Reserve's decision to start reducing its monetary stimulus by $10 billion to $75 billion from January. Many had feared the decision to rein in its policy of quantitative easing, or QE, would be negative for stocks as the stimulus, in its various guises, has shored up markets over the past few years.
``Earlier fears that the Fed calling time on QE would knock the potential for a classic Santa rally certainly don't seem to be living up to expectations,'' analysts at Monex Capital Markets said.
European markets have risen for five sessions in a row. By mid-session Tuesday, Britain's FTSE 100 index was up 0.3 percent to 6,700, while France's CAC 40 rose 0.3 percent to 4,225. The German stock market, which hit a record high Monday, was closed.
U.S. stocks, which also hit records on Monday, appeared set for modest gains Tuesday. Dow futures rose 12 points to 16,250, while the broader S&P 500 futures rose a point to 1823.80. The main point of interest later will be data on durable goods orders and new home sales.
Earlier, Asian stocks advanced Tuesday after the People's Bank of China injected 29 billion yuan ($4.8 billion) into Chinese banks. Analysts believe the banks have been hording cash ahead of year-end to meet higher regulatory requirements.
Several spikes in bank-to-bank lending rates caused concern among investors that a cash shortage could force banks to restrain commercial lending and pressure the world's second-largest economy.
The rate banks charge each other for a one-week loan had surged as high as 9.8 percent on Monday, but they dropped to 6.2 percent Tuesday.
Tokyo's Nikkei 225 index inched up 0.1 percent to 15,889.33, after briefly surpassing the 16,000 level for the first time in six years in the morning session. China's Shanghai Composite added 0.2 percent to 2,092.91. Hong Kong's Hang Seng index gained 1.1 percent to 23,179.55.
In the currency markets, the euro was 0.2 percent weaker at $1.3676 while the dollar also rose against the yen, gaining 0.2 percent to 104.31 yen. In the oil markets, a barrel of benchmark crude was 2 cents lower at $98.89.