World stocks recorded gains on Thursday, May 31, after renewed efforts from politicians in Rome to form a government and data from China pointed to its giant economy performing well.
The moves meant Milan’s bourse .FTMIB was 0.9 percent higher, Britain’s FTSE .FTSE and France’s CAC .FCHI added 0.2-0.4 percent though Germany’s DAX .GDAXI stalled after a report Donald Trump aimed to push German carmakers out of the United States.
Italy’s 2-year government bond yield, which has been the focus of a recent selloff, was down as much as 50 basis points at 1.45 percent IT2YT=RR, while the euro climbed to $1.1690 after making its biggest jump since early January on Wednesday.
Rome’s benchmark 10-year bond yield IT10YT=RR was down 20 bps at 2.85 percent too and the closely watched Italy/Germany 10-year bond yield spread tightened to 248 bps, as much as 22 bps tighter than the previous days close.
“It seems at least the 5-Star movement is making an effort to form a government. Apparently they have been given a day to try,” said ING strategist Martin Van Vliet.
“The market is just rallying hoping that new elections may avoided.”
Asia’s mood overnight had been lifted by data showing growth by China’s vast manufacturing sector accelerated strongly and well above forecasts in May to an eight-month high.
It gave bluechip Chinese shares .CSI300 their best day since August 2016 with gains of just over 2 percent.
Hong Kong’s Hang Seng .HSI rose over 1 percent too and MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS made 0.8 percent as it clambered off near two-month lows.
“We have about 25 percent in Asia,” said Jake Robbins a global equities fund manager at Premier Asset Management. “China is the second biggest economy in the world and it is growing very, very quickly.”
Tokyo’s Nikkei .N225 meanwhile added 0.8 percent, helped by a settling of the yen JPY= which has been drawing in buyers during the recent rise in Italian and euro zone uncertainty.
French inflation data also rose to its highest level since August 2012 coming a day after Germany’s figure had also past the European Central Bank’s target of just under 2 percent after hitting its highest in more than a year.
