Market update: Stronger than expected Chinese trade data support markets around the globe

After two days of declines, US equities rose once again on Wednesday as investors relaxed and became more optimistic about the fourth quarter earnings season, helped by the mining company Alcoa’s relatively upbeat global outlook announced the day before. Within the 10 S&P 500 groups, six sectors rose with the industrials and healthcare sectors leading the gains (Dow Jones +0.5%, S&P 500 +0.3%).

Overnight, Asian stocks moved firmly into positive territory, after Chinese exports grew more than expected and speculation that Japan will further expand monetary stimulus continued. Japan’s Topix Index closed up 1.1%, the Hang Seng gained 0.6% while China’s Shanghai Composite was up 0.4%. The biggest surprise in the Chinese numbers was exports, which increased by 14.1% year-on-year (y-o-y) in December, the highest since May 2012; imports also rose by 6% yoy. Further detail revealed that the US has now replaced the European Union as China’s largest export market. In European markets early this morning the positive sentiment has continued (FTSE Eurofirst 300 and FTSE 100 indices both up 0.1% at the time of writing). Growth-linked currencies and commodities are also edging up.