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Markets outside of Asia recover their poise

LONDON (AP) ? Aside from a big sell-off in Asia, markets generally recovered their poise Monday, as investors shrugged off fears of an imminent scaling-back of the U.S. Federal Reserve's monetary stimulus.

Investors in Europe, in particular, regained their footing after last week's stronger-than-expected U.S. jobs report prompted an end-of-week sell-off. After European markets closed on Friday, U.S. stocks posted solid gains and that's carried through into Monday's session.

Given the prevailing focus on the U.S., the key day this week will likely be Wednesday, when the minutes to the last policy meeting of the Fed are published. The Fed's chairman, Ben Bernanke, is also due to deliver a speech.

"It is possible that the combination of these events will encourage speculation that tapering is almost upon us," said Jane Foley, an analyst at Rabobank International. "Alternatively there is the possibility that Bernanke will push back against speculation that the Fed is ready to take a less accommodative position."

Without a clearer gauge, markets around the world have been volatile for weeks. For the past few years, the Fed's stimulus, echoed by other central banks, has been one of the props shoring up a number of financial assets, in particular stocks.

European markets started the week positively with the FTSE 100 index of leading British shares closing up 1.17 percent at 6,450. Meanwhile, Germany's DAX rose 2.08 percent to 7,968 and the CAC-40 in France was 1.86 percent higher at 3,823.

The mood in Europe was also helped by the news that Greece's international creditors appear to have reached a deal with the cash-strapped country over further economic reforms required for the release of the bailout funds. A meeting later in the day of the finance ministers of the 17 European Union countries that use the euro is expected to confirm the release.

In the U.S., the Dow Jones industrial average was up 0.43 percent at 15,200, while the broader S&P 500 index rose 0.37 percent to 1,637.

While the Fed looks set to be the main market driver, investors will be closely monitoring the start of the U.S. second-quarter corporate reporting season, which starts in an after-hours statement from aluminum company Alcoa Inc.'s.

"One update does not determine the tone of the entire earnings season, but at least it will provide a view on how the aluminum market is faring, an important element given ongoing worries about the Chinese economy," said Chris Beauchamp, market analyst at IG.

Those worries over China weighed on investor sentiment earlier during Asia's session. Investors appear to be getting increasingly worried about a cash squeeze in the world's number 2 economy.

In mainland China, the Shanghai Composite Index closed down 2.4 percent to 1958.27 while the smaller Shenzhen Composite Index lost 3.6 percent to 889.53. Elsewhere, Hong Kong's Hang Seng closed down 1.3 percent at 20,582.19 and Japan's Nikkei 225 fell 1.4 percent to 14,109.34.

In other financial markets, the mood was fairly benign. Among major currencies, the euro was up 0.3 percent at $1.2867 while the dollar fell 0.4 percent to 100.81 yen.

In commodity markets, the price of oil was down 8 cents at $103.14 a barrel.

Source: http://news.yahoo.com/markets-outside-asia-recover-poise-141812215.html

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