Chinese Markets Skyrocket While Oil Prices Firm
China’s major stock indexes were broadly higher on Monday, with the Shenzhen Composite climbing 4.87 percent as of 1:57 p.m. HK/SIN, just off its daily gain of 4.963 percent. The Shanghai Composite gained 4.17 percent by mid-afternoon and was looking for its highest daily gain since March 2016. Support for the Chinese markets came after a rally on Friday when Chinese authorities moved to support the market following GDP data that was weaker than expected.
Also supporting Chinese markets was pressure in other global arenas, including in Italy, where the country faces budget rejections and sanctions if it does not explain to the European Commission its break of rules by later on Monday. The European Commission is expected to rule for the first time ever on Tuesday in favor of asking Italy to revise its draft budget. If this happens it will be the first time in history that such a request was made.
Oil Prices Rise
Oil prices were higher on Monday, with U.S. WTI futures gaining 0.38 percent to trade at $69.38 per barrel and Brent crude futures up 0.28 percent to $80 per barrel. Though oil prices are expected to tighten further in the coming days as the world braces for the sanctions against Iran that will be in force on November 4, U.S. crude prices are still down nearly 11 percent from their peak in the past two weeks. Brent is down nearly 9 percent from peaks hit earlier this month.
On Thursday, U.S. crude futures traded near a five-week low, falling more than $8 per barrel from the four-year high of $76.90 hit in early October. The devaluation was due to several factors including rising U.S. stockpiles, and rising prices which traders feared would decrease demand. Finally, rising tensions between the United States and Saudi Arabia regarding the murder of Saudi journalist and U.S. resident Jamal Khashoggi has traders concerned that the oil markets will be affected.