Global shares near five-month high

London — World shares remained near a five-month high on Tuesday as China cut its growth targets to a 30-year low but added more stimulus, and a revived dollar headed for a fifth day of gains in the currency markets.

German and French services data helped Europe’s Stoxx 600 index towards a fourth day of gains, though with Italy confirmed back in recession and after a 15% surge in 2019, there was a little in the way of new energy.

Asia had struggled after Beijing made a widely expected move at the National People’s Congress to lower its growth target to 6% to 6.5% from last year’s 6.5%.

Chinese stocks gained, however. Premier Li Keqiang announced nearly two-trillion yuan ($298.31bn) of cuts in taxes and companies fees. Authorities also stepped up efforts to get big banks to lend more.

“You have had positive news on trade and positive news on the Federal Reserve [pausing rate hikes], so you have had less to worry about, but what hasn’t really gone away is this slowdown in global growth,” JP Morgan Asset Management strategist Mike Bell said.

Wall Street’s major indices were expected to open lower after falling on Monday. An unexpected decline in US construction spending was cited as a factor.

Fatigue is clearly playing a role, though. MSCI’s All Country World Index which covers 47 economies and thousands of individual stocks, has now risen 16% from its near two-year low set on December 26 low.

It barely budged on Tuesday, but the index is now trading at 14.6 times expected earnings, on par with levels in early October, when a bear market began globally.

A media report on Monday that US President Donald Trump and Chinese President Xi Jinping could reach a formal trade deal at a summit around March 27.

Trump looked to have already opened a new front on Monday with a plan to end preferential trade treatment for India that allows duty-free entry for up to $5.6bn worth of its exports to the US.

Dollar gains

In currency markets, the dollar gained with other major central banks expected to tilt to a more dovish stance than the Federal Reserve.

The euro slipped 0.1% to $1.1330, amid expectations the European Central Bank will prepare the ground for more ultra-cheap long-term funding at its policy meeting on Thursday.