Global markets rise, buoyed by the prospect of further stimulus from the People's Bank of China, but Japan's economy contracts at its fastest pace since 2014.
Global markets rose overnight, buoyed by the prospect of further stimulus from the People's Bank of China, but the Australian share market could be in for a fairly flat start to trade.AUD: 67.16 US cents, 51.
66 British pence, 61.98 Euro cents, 73.83 Japanese yen, $NZ1.043Europe: FTSE 100 +0.3pc at 7,433, DAX +0.3pc at 13,783, CAC +0.3pc at 6,085, Euro Stoxx 50 +0.4pc at 3,520China's central bank lowered a key interest rate and injected more money into markets, which saw the Shanghai Composite rise 2.3 per cent on Monday. "Some dealers hold the view that Beijing will intervene in the markets again should the situation get much worse, which could explain the resilience of equity markets," David Madden from CMC Markets told Reuters. The optimism extended to the European session, with the German DAX touching record highs before retreating slightly.Mining giant Rio Tinto cut its outlook for iron ore shipments from the Pilbara"The cyclone caused infrastructure damage across our entire Pilbara network, including impact to access roads, electrical and communications infrastructure and accommodation," the company said. However, Rio Tinto's London-listed shares edged higher. The news came ahead of rival BHP's half-year profit results, due to be released later this morning.The Japanese market was less buoyant than its global counterparts on Monday, with the Nikkei losing 0.7 per cent. Japan's economy shrank at its fastest pace in nearly six years in the December quarter, raising concerns it could fall into recession. The country's GDP contracted by 1.6 per cent in the quarter, equating to an annual decline of 6.3 per cent. "The economy is likely to have deteriorated further since then. This is because Japan is exposed to both a sharp fall in Chinese tourism spending and prolonged factory closures in China as a result of efforts to contain the coronavirus," economists from Capital Economics wrote in a note. "If this epidemic is not contained by the time of the Tokyo Olympic Games, the damage to the [Japanese] economy will be huge,"
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