Monday, May 12, 2014

China shares are Up on reform plans

China and Hong Kong stocks soared Monday thanks to Beijing's promises to go ahead and implement a broad range of capital market reforms and a surging commodities sector. However, other markets are subdued after a record close for the Dow Jones industrial average.

China's Shanghai Composite Index rose by 2.1% to 2,052.87 which is its highest close since April 24. China announced late Friday that they will let local governments to issue bonds and will hasten the approval process for initial public stock offerings. The news also lifts the Hong Kong's market with the Hang Seng up 1.8 percent to 22,261.61.

Nickel companies rose sharply after the nickel futures index jumped to its highest since February 2012 on supply concerns. Investors and consumers are buying the metal on prospects of a worsening supply shortfall later in the year.

Other markets were more subdued despite a rebound in U.S. tech stocks which pushed the Dow to a record close on Friday. Tensions between the West and Russia over the future of Ukraine continue to provide a negative backdrop for investment sentiment.

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