China Leads Global Stocks Higher After Holiday Break, Other Markets Mixed

China Leads Global Stocks Higher After Holiday Break, Other Markets Mixed

China’s stock market rallied on Monday as it reopened after a week-long Lunar New Year holiday, while other markets showed mixed performance amid worries over the global economic recovery and the Omicron variant.

The Shanghai Composite Index soared 5.6%, the biggest gain since July 2020, as investors welcomed the easing of Covid-19 curbs in some regions and the central bank’s liquidity support for the financial system. The Hang Seng Index in Hong Kong added 2.1%, while the CSI 300 Index of blue-chip stocks jumped 6.3%.


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In Europe, stocks opened lower as investors weighed the impact of rising inflation and energy costs on the region’s growth. The Stoxx Europe 600 Index fell 0.6%, dragged down by losses in energy, mining and banking sectors. Germany’s DAX dropped 0.7%, France’s CAC 40 slid 0.8% and the UK’s FTSE 100 dipped 0.9%.

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US stock futures also pointed to a lower open, with the S&P 500, the Dow Jones Industrial Average and the Nasdaq 100 all down about 0.4%. Investors are awaiting a busy week of earnings reports from companies such as Walmart, Home Depot, Nvidia and Tesla, as well as the release of the minutes from the Federal Reserve’s latest policy meeting.

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The only exception was the northern province of Hebei, which had a recent outbreak and imposed a lockdown on its capital, Shijiazhuang

In the bond market, the yield on the 10-year US Treasury note rose to 2.05%, the highest since January 2020, as traders anticipated more aggressive rate hikes from the Fed this year. The yield on the 10-year German bund increased to 0.41%, the highest since June 2019, while the yield on the 10-year UK gilt climbed to 1.17%, the highest since October 2018.


In the currency market, the US dollar strengthened against most of its peers, as the greenback benefited from its status as a safe-haven asset amid the market turmoil. The Bloomberg Dollar Spot Index, which tracks the performance of the dollar against a basket of 10 major currencies, rose 0.2%. The euro fell 0.3% to $1.1235, the lowest since December 2020, while the British pound dropped 0.4% to $1.3385, the lowest since July 2020. The Japanese yen was little changed at 114.35 per dollar, while the Chinese yuan gained 0.2% to 6.3675 per dollar.

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