Markets gave up early gains to turn lower, with coronavirus and global slowdown concerns keeping underlying sentiment cautious.
- European stocks ended higher on Monday, buoyed by the Chinese central bank’s decision to cut lending rates in order to boost the country’s economy.
- The US market was closed on Monday.
- Asian Stocks ended mixed on Monday as coronavirus worries persisted and Chinese policymakers ramped up support for the economy and companies that have been hit by a slump in sales and activity.
- Peoples Bank of China lowered the interest rate on its medium term loans on on 17th February 2020, as policymakers try to support the already slowing economy that hit by the coronavirus outbreak. The interest rate on CNY 200 billion yuan ($28.65 billion) worth of one-year medium-term lending facility (MLF) loans to financial institutions was cut by 10 basis points to 3.15% from 3.25% previously, the central bank said in a statement. The move is expected to pave the way for a cut in the country’s benchmark loan prime rate (LPR), which will be announced later this week. The PBOC also said that it injected CNY 100 billion of reverse repos to financial institutions on Monday. Previously on Saturday, the government issued CNY 8 billion in subsidy funds to support local authorities, 3.5 billion yuan of which are earmarked for Hubei province.
- Foreign direct investment into China rose 4% year over year to CNY 87.57 billion or 2.2% to USD 12.68 billion in January 2020. China Foreign Direct Investment – data, historical chart, and calendar of releases – was last updated on February of 2020 from its official source.
- Reflecting an improvement in expectations, the University of Michigan released a report showing an unexpected increase in U.S. consumer sentiment in the month of February. Preliminary data showed the consumer sentiment index rose to 100.9% in February from the final January reading of 99.8. The uptick surprised economists, who had expected the index to edge down to 99.5. The unexpected increase by the headline index came as the index of consumer expectations climbed to 92.6 in February from 90.5 in January.
- Singapore’s economic growth rose more than initially estimated in the fourth quarter, but the government downgraded the growth outlook as the China coronavirus outbreak is expected to severely hurt the domestic economy. Gross domestic product rose 1.0% year-over-year in the fourth quarter, following a 0.7% increase in the preceding quarter, data from the Ministry of Trade and Industry showed on Monday. According to the initial estimate, the GDP grew 0.8%. On a quarter-on-quarter seasonally-adjusted annualized basis, the economy expanded at a slower pace of 0.6% after a 2.2% growth in the prior quarter. This was in line with the initial estimate.
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