By JOE McDONALD, AP Business Writer
BEIJING (AP) — Major global stock markets were mostly higher Monday and China’s currency weakened after the head U.S. central banker fueled expectations of an interest rate hike this year.
KEEPING SCORE: In early trading, Germany’s DAX gained 0.3 percent to 10,315.77 while France’s CAC-40 was unchanged at 4,511.11. London and U.S. markets were closed for a holiday. On Friday, the DAX and Britain’s FTSE 100 both rose 0.1 percent and France’s CAC 40 gained a bit less than that.
ASIA’S DAY: Tokyo’s Nikkei 225 rose 1.4 percent to 17,068.02 and Hong Kong’s Hang Seng added 0.3 percent to 20,629.39. India’s Sensex advanced 0.3 percent to 26,724.49, and benchmarks in New Zealand, Taiwan, Indonesia and Singapore gained. The Shanghai Composite Index held steady at 2,822.45 and Sydney’s S&P-ASX 200 also was unchanged at 5,408.00. Seoul’s Kospi shed 0.1 percent to 1,967.13.
WALL STREET: Stocks recorded their strongest week in almost three months. Banks gained after Janet Yellen said the U.S. Federal Reserve intends to keep raising interest rates provided the economy improves. Banks stand to make bigger profits on lending if interest rates rise. Phone companies traded higher after Verizon reportedly agreed in principle to a new contract with striking employees. Alphabet led technology stocks higher. The Dow Jones industrial average rose 0.3 percent, the Standard & Poor’s 500 index added 0.4 percent and the Nasdaq composite advanced 0.6 percent.
YELLEN’S OUTLOOK: Yellen said it will be appropriate to raise interest rates if the economy improves but emphasized the Fed will move slowly and carefully. There were signs of improvement last week, including increased home sales. The Commerce Department said the U.S. economy grew a bit more in the first quarter than previously estimated.
ANALYST’S TAKE: “Janet Yellen’s remarks on Friday confirm that at least one increase in the Fed rate is likely this year. Traders will take confidence from the fact that stock markets are firm in the face of this confirmation. As far as the markets are concerned, the timing of the next Fed increase now becomes the central issue,” Ric Spooner of CMC Markets said in a report.
THE YUAN WEAKENS: China’s yuan weakened after the central bank set the starting point for the day’s trading at its lowest level against the dollar in five years. The People’s Bank of China failed to factor a possible U.S. rate hike into its plans and had to change its stance following Yellen’s speech, according to Stephen Innes, a trader for OANDA. “I don’t think the bank is trying to drive down the yuan,” said Innes.
WEEK AHEAD: Investors were looking ahead to China’s May manufacturing index due out Wednesday and first-quarter gross domestic product for India on Tuesday, Australia on Wednesday and South Korea on Thursday.
ENERGY: Benchmark U.S. crude shed 12 cents to $49.21 per barrel in electronic trading on the New York Mercantile Exchange. The contract shed 15 cents on Friday to $49.33 per barrel. Brent crude, used to price international oils, declined 21 cents to $49.74 per barrel in London. The contract declined 22 cents the previous session to $49.95.
CURRENCY: The dollar gained to 111.31 yen from Friday’s 110.23. The euro edged up to $1.1126 from $1.1116.
Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.