Global markets rise on China stimulus hopes, corporate deals; Tokyo touches 15-year high

LONDON – Global stocks rose Friday, with Japan’s market touching a 15-year high and some European indexes pushing further into record territory, on news of more corporate deals and hopes for stimulus in China.

KEEPING SCORE: Germany’s DAX index added 1.4 per cent to 12,338.18 and France’s CAC 40 gained 0.4 per cent to 5,231.83. A broader index of European shares, the Stoxx 600, hit a record high for the second day running, gaining 0.6 per cent. On Wall Street, the futures for the Standard & Poor’s 500 and the Dow Jones industrial average were both up 0.2 per cent.

GE DEAL: Investors were focused on the news that GE will sell most of its financial unit, GE Capital, as well as real estate for $23 billion. It aims to focus on its industrial business and said it will start a big share buyback worth $50 billion. Share buybacks tend to bolster a company’s share price, but GE said the deals will also result in a charge of about $16 billion in the first quarter. Shares in GE were up 6 per cent in pre-market trading.

CHINA DATA: Earlier, sentiment was supported by Chinese data showing consumer inflation remained at 1.4 per cent in March, well below the government’s official target. That fueled expectations the central bank might launch new stimulus to fend off deflation. Low inflation is a boon to consumers but a bout of potentially damaging deflation could add to fears about the Chinese growth outlook.

CHINA STIMULUS: “We expect possibly the weakest” growth in China this quarter since the 2008 crisis, “and thus more easing,” Citigroup economist Minggao Shen said in a report.

ASIA’S DAY: The Shanghai Composite Index added 2 per cent to 4,034.31, Seoul’s Kospi rose 1.4 per cent to 2,087.76 and Hong Kong’s Hang Seng gained 1.2 per cent to 27,272.39. Sydney’s S&P ASX 200 gained 0.6 per cent to 5,968.40 and Singapore, Manila and New Zealand also rose. India’s Sensex shed 0.3 per cent to 28,789.16.

NIKKEI RECORD: Japan’s Nikkei 225 closed down 0.2 per cent to 19,907.63 after rising above 20,000 for the first since April 2000 during the morning session. The gains were based on expectations for Japan’s economic recovery and brisk corporate earnings, following aggressive monetary stimulus. The benchmark index, however, could not sustain that level as investors turned to take profits.

OIL: Benchmark U.S. crude shed 17 cents to $50.62 a barrel in electronic trading on the New York Mercantile Exchange. It rose 37 cents to close at $50.79 a barrel on Thursday.

CURRENCIES: The dollar edged down to 120.44 yen from 120.57 yen while the euro fell to $1.0583 from $1.0662.