Specialist Ronnie Howard, center, works on the floor of the New York Stock Exchange on Tuesday, Jan. 5, 2016. U.S. stocks are opening modestly higher as trading stabilizes a day after Beijing pumped $20 billion in China’s money market following a plunge that unsettled investors around the globe. AP
NEW YORK, United States — Beijing pumped 130 billion yuan ($20 billion) into China’s money market to soothe worries over its slowing economy. The move stabilized US and European stock markets but doubts persist.
Markets in London, Frankfurt and Paris all finished with modest gains, along with the S&P 500 in the US.
The advance was a reversal from Monday’s bruising open to the 2016 trading year, when a deep decline in Chinese stocks prompted a global stock sell-off. Markets had also been rattled by rising tensions between Saudi Arabia and Iran over the Saudi execution of a prominent Iran-backed Shiite cleric.
BACKSTORY: China stock markets fall 7%; trading stopped Monday | Global stocks begin 2016 with China growth hangover
In spite of the massive cash infusion by the People’s Bank of China, the benchmark Shanghai Composite Index ended down 0.3 percent on Tuesday. News reports also said state-controlled funds bought stocks.
Investors are trying to ascertain whether China and the Saudi-Iran rift “should be something that we should worry about for much of this year, or whether it was simply an opening day flash in the pan,” said Sam Stovall, chief investment strategist at S&P Capital IQ.
“It’s still unresolved.”
Some analysts suggested that the turbulence that afflicted Chinese equities on Monday had not yet run its course.
“It’s an unstable situation when local investors are selling to a government buyer, it can only last so long,” said Jasper Lawler, a market analyst at CMC Markets UK.
“There are still worries about the stability of the Chinese economy and the ability of the rest of the global economy to come to terms with the new China, one that no longer looks to double-digit GDP growth as the norm,” said analyst James Hughes at trading firm GKFX.
“Markets have not coped well with this up to now.”
London finished with a gain of 0.7 percent, while Paris and Frankfurt each rose 0.3 percent. The S&P 500 added 0.2 percent.
Key figures around 2200 GMT
New York – Dow: UP 0.1 percent at 17,158.66 (close)
New York – S&P 500: UP 0.2 percent at 2,016.71 (close)
New York – Nasdaq: DOWN 0.2 percent at 4,891.43 (close)
London – FTSE 100: UP 0.7 percent at 6,137.24 points (close)
Paris – CAC 40: UP 0.3 percent at 4,537.63 (close)
Frankfurt – DAX 30: UP 0.3 percent at 10,310.10 (close)
EURO STOXX 50: UP 0.4 percent at 3,178.01 (close)
Tokyo – Nikkei 225: DOWN 0.4 percent at 18,374.00 (close)
Euro/dollar: DOWN at $1.0750 from $1.0833 late Monday
Dollar/yen: DOWN 119.06 yen from 119.42 yen
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