China gives markets another reason to cheer By Reuters

A look at the day ahead in European and global markets from Rae Wee

Asian markets rallied on Thursday, defying overnight weakness on Wall Street, as optimism over China’s latest stimulus measures received a fresh boost from news of a possible capital injection into its top banks.

Authorities are considering a $142 billion infusion to help big lenders, Bloomberg News reported, just two days after policymakers announced a series of measures aimed at pulling the country out of a deflationary funk.

While the latest moves indicate a sense of urgency among authorities as Beijing’s 5 percent economic growth target for the year begins to slip from view, investors have seen reason to apply.

After months of seemingly futile waiting by markets, Chinese authorities appear to be finally waking up to the idea that much more needs to be done to get the world’s second-largest economy back on track.

China’s blue-chip index reversed early losses to trade higher after the latest news report, while Hong Kong’s rose about 2 percent.

MSCI’s broadest index of Asia-Pacific shares outside Japan hit a more than two-year high.

That set the tone for a strong open in Europe, with futures posting solid gains during the Asian session.

Outside of China, the day was already shaping up to be a busy one for global markets, with a Swiss National Bank (SNB) rate decision set to take place alongside a series of speeches by Federal Reserve and European Central Bank officials.

The SNB is expected to cut rates by 25 basis points, marking its third consecutive rate cut.

Needless to say, the focus will be on policymakers’ guidance on their respective rate outlooks, with the ECB likely to maintain a less hawkish stance on rate cuts compared to their US counterparts.

Key developments that could influence markets on Thursday:

– The Swiss National Bank’s rate decision

– Speeches of the Fed, of the ECB decision-makers

– Weekly US Jobless Claims

(By Rae Wee; edited by Edmund Klamann)