Global stocks rally on TPP, weaker dollar
October 6, 2015, 1:59 pm

The yen was up against the US dollar on Tuesday. A weaker dollar helped spark a global rally [Xinhua]

Japan’s Nikkei closed up 1 per cent while South Korea’s Kospi finished with a 0.63 per cent gain.

China’s benchmark Shanghai Composite closed up 0.48 per cent on Tuesday. It was up 31.16 per cent year on year, but down 5.62 per cent year to date.

Asian stocks were given a nudge by speculation that a two-day Bank of Japan meeting – which ends on Wednesday – could spark new stimulus programs for the once-mighty economy.

Asian stocks were also buoyed by a rally of US stocks on Monday – extending five days of gains first prompted by a weaker dollar on Friday, despite lower-than-expected new jobs data released by the Labor Department.

(Most major currencies, except for Canada’s loonie, were up against the US dollar on Tuesday.)

Ironically, the poor jobs data helped end speculation – which had rattled Wall Street for weeks – about a likely Federal Reserve rates hike in October. Most analysts believe the Fed will not move to tighten policy for a few months yet.

On Monday, the Dow Jones Industrial Average closed up 1.85 per cent, the Nasdaq was up 1.5 per cent while the S&P 500 closed up 1.83 per cent. These stocks opened slightly down on Tuesday but soon reversed course and headed upward.

Global stocks were also given an upward thrust by news of a “breakthrough” in negotiations for the Trans-Pacific Partnership (TPP), one of the key free trade agreements for the Asia-Pacific region, where trade would be reportedly “liberalized” in 40 per cent of the world economy.

Negotiated between the US and 11 Pacific region countries, the deal – if approved – would cut trade barriers and set common standards from Vietnam to Canada. The deal, however, faces a lot of skepticism and doubt from lawmakers in the TPP countries.

In Europe, meanwhile, stocks followed their US and Asian counterparts: The pan-European STOXX 600 was up over 0.1 per cent near closing while Germany’s Dax and France’s CAC were both up 0.3 per cent.

The BRICS Post with inputs from Agencies