China stocks continue to advance as Shanghai bull market begins.
With the Shanghai Composite Index passing a milestone on Tuesday, rising 20 percent since December 3, investors respond enthusiastically as the Shanghai bull market begins. That magnitude of an advance is considered by many as the signal for the onset of a new bull market. China stocks have benefited from the government’s efforts to support urban development. The January 24 release of the HSBC Flash China Manufacturing PMI boosted investor confidence, as it reached a 24-month high of 51.9, signaling expansion. The Shanghai Composite Index advanced 0.53 percent to 2,358 (NYSEARCA:FXI). Hong Kong’s Hang Seng Index dipped 0.07 percent to 23,655 (NYSEARCA:EWH).
The major European stock indices were relatively unchanged on Tuesday in the absence of any significant developments (NYSEARCA:VGK).
As of 11:09 EST, the Euro STOXX 50 Index advanced 0.05 percent to 2,745 – staying well above its 50-day moving average of 2,638. After breaking above its resistance level of 2,700 on January 21, the STOXX 50 is once again attempting a sustained advance above that level, which has been a barrier since the beginning of the new year. Its Relative Strength Index is 67.57 (NYSEARCA:FEZ). The FTSE 100 Index climbed 0.58 percent to 6,328 (NYSEARCA:EWU). The German DAX Index rose 0.09 percent to 7,838 (NYSEARCA:EWG). France’s CAC 40 Index crept upward by 0.01 percent to 3,781 (NYSEARCA:EWQ). Spain’s IBEX 35 Index fell 0.48 percent to 8,630 (NYSEARCA:EWP). Italy’s FTSE MIB Index declined 0.13 percent to 17,873 (NYSEARCA:EWI).
As of 11:23 EST, the euro advanced 0.17 percent against the dollar, trading at $1.3479 (NYSEARCA:FXE). Dollar Lower vs. Euro, Yen Ahead of Fed, U.S. Data
Spain’s ten-year bond yield climbed to 5.14 percent on Tuesday from Monday’s closing level of 5.01 percent. Spain’s two-year bond yield declined to 2.45 percent on Tuesday from Monday’s closing level of 2.50 percent (NYSEARCA:EWP).
Italy’s ten-year bond yield declined to 4.19 percent on Tuesday from Monday’s closing level of 4.23 percent (NYSEARCA:EWI).
On London’s ICE Futures Europe Exchange, March futures for Brent crude oil advanced by 70 cents (0.62 percent) to $114.18/bbl. (NYSEARCA:BNO, NYSEARCA:USO).
In Japan, stocks made a rarely simultaneous advance with the yen (NYSEARCA:FXY). The nation’s financial sector led the move, with three of the nation’s largest banks jumping from 2.9 percent to 4.4 percent. The Nikkei 225 Stock Average advanced 0.39 percent to 10,866 (NYSEARCA:EWJ).
American stock index futures trading was in negative territory ahead of Tuesday’s opening bell as investors worried that this week’s FOMC meeting could result in a decision to end quantitative easing. The March 13 Dow Jones Industrials future declined 0.12 percent to 13,815 as of 9:14 EST. The March 13 S&P 500 future fell 0.24 percent to 1,493 (NYSEARCA:SPY). The March 13 Nasdaq 100 future dropped 0.16 percent to 2,733.
Bottom line: After skyrocketing 2.41 percent on Monday, the Shanghai Composite Index advanced another 53 basis points on Tuesday to reach 2,358 and officially enter what many consider to be a bull market, after climbing 20 percent since December 3.