Global stocks rallied with U.S. equity futures, emerging-market currencies rose and crude oil climbed to an eight-week high as monetary stimulus in China brightened prospects for the world’s second-largest economy.
Benchmark share indexes advanced across Asia after the People’s Bank of China cut lenders’ reserve requirements, freeing up funds to help spur lending. Russia’s ruble and South Africa’s rand led gains among major currencies, while China’s yuan rose for the first time in eight days. Nickel and tin led gains in industrial metals prices as Germany’s bonds declined. Japan sold 10-year debt at a negative yield for the first time.
While February marked a fourth consecutive monthly decline in global stocks, a benchmark equities index rallied more than 5 percent since Feb. 11. Mounting signs that American consumers can still power the world’s largest economy and hints from central banks in Asia and Europe that more stimulus is at the ready underpinned the revival, along with rebounds in crude oil and the yuan.
“Market sentiment is on its way toward a recovery, but the slightest bad news can still rock it,” said Toshihiko Matsuno, chief strategist at SMBC Friend Securities Co. in Tokyo. The cut in Chinese lenders’ reserve requirements was the first in four months and comes after the economy expanded last year at the slowest pace in a quarter century.
The Stoxx Europe 600 Index gained 0.3 percent as of 8:25 a.m. London time. Barclays Plc slid 5.7 percent in London after the bank said fourth-quarter profit fell by more than half and announced plans to sell down a 62 percent stake in its Africa business — news that led to Barclays Africa Group Ltd. falling as much as 5 percent in Johannesburg. Glencore Plc declined 1.1 percent after the commodities company reported a 69 percent slump in annual profit.
India’s S&P BSE Sensex jumped 2.8 percent, rallying after the government announced its budget on Monday. Hong Kong’s Hang Seng Index added 1.6 percent and the Shanghai Composite Index gained 1.7 percent.
The yuan strengthened 0.2 percent versus the dollar as the People’s Bank of China raised its daily reference rate for the first time in a week. The currency strengthened 0.3 percent in February, after losses of 1.3 percent or more in each of the previous three months.
Russia’s ruble rose 1.7 percent versus the dollar and Malaysia’s ringgit strengthened 0.7 percent as the rebound in crude prices brightened prospects for the oil-exporting nations. South Africa’s rand jumped 1 percent as data showed foreign investors on Monday pumped the most money into the nation’s stock market since 2009.
The Australian dollar rose 0.5 percent, reversing an earlier decline. The nation’s central bank kept its benchmark interest rate at a record-low 2 percent at a Tuesday policy meeting and said low inflation offers scope for
easing. Japan’s yen weakened 0.4 percent, after earlier rising as much as 0.5 percent.
The Japanese government got paid to borrow money for a decade for the first time, selling 2.2 trillion yen ($20 billion) of the debt at an average yield of minus 0.024 percent on Tuesday. The benchmark 10-year bond yield dropped to minus 0.075 percent after the auction, matching a record low. Money-market rates declined in China as the cut in lenders’ reserve requirements freed up funds. The one-day repurchase rate, a gauge of interbank funding availability, dropped four basis points to 1.94 percent in Shanghai.