Asia shares action as China raises high hopes for recovery

SYDNEY (Reuters) – Asian stock markets tumbled into the black on Monday, as the promise of economic stimulus boosted Chinese equities for a second session and helped ease the geopolitical concerns over Saudi Arabia. Italy and Brexit.

China's tax cuts next year could account for more than 1% of gross domestic product (GDP), said a central bank advisor in a statement released Monday, saying policy makers could consider a new series of reductions.

The government has also released a draft of the new rules on tax deductions available to individuals.

The Blue Chips in Shanghai jumped 4.8%, the largest daily gain in three years, which helped lift Beijing's promise of support for the economy and business on Friday.

This allowed the E-Mini futures for the S & P 500 to recover all their initial losses and increase by 0.2%. MSCI's broadest index, composed of equities from the Asia-Pacific region outside Japan, increased by 1%.

The Nikkei of Japan rose 0.4% after losing more than 1% previously, while South Korean equities were stable.

Spreadbetters have announced opening opportunities for European stock exchanges.

This week is the peak period of the US earnings season. Reporting companies include Amazon, Alphabet, Microsoft and Caterpillar.

Helped by a strong economy and strong corporate tax cuts, earnings per share of the S & P 500 index is expected to rise 22% in the third quarter, according to I / B / E data. / S of Refinitiv.

"The season on an absolute basis will probably end up being" strong "and the vast majority of companies will exceed consensus expectations," JPMorgan analysts said in a note.

"However, the headwinds are strengthening at the margin in the form of the stronger US dollar, supply chain disruptions due to all the uncertainties of trade and rising costs. Even the slightest suspicion of reversing the fundamentals of profit would have serious consequences. "

The outlook for global growth in 2019 has faded for the first time, according to polls by Reuters from economists, who warned that the US-China trade war and tighter financial conditions would trigger the next slowdown.

Saudi Arabia remained in the limelight as Riyadh on Sunday described the murder of journalist Jamal Khashoggi as a "grave and grave mistake", while seeking to protect his powerful crown prince from the worsening crisis.

On Saturday, US President Donald Trump joined with European leaders to demand more responses from Saudi Arabia after Riyadh acknowledged that the journalist had died at the consulate after weeks of denial.

(Graphic: Asian Stock Exchanges – tmsnrt.rs/2zpUAr4)

ACCOUNT IN ITALIAN

In Europe, Italy has until Monday to explain to the Commission its breach of the rules and faces the rejection of its budget, which could eventually lead to sanctions.

The Italian government is waiting for the European Commission to decide Tuesday to ask a member state to revise its draft budget, a government source said on Sunday.

Italian bond yields reached their highest level since early 2014 on Friday, and investor demand for German debt is at its highest level in five and a half years.

Italy should be on the agenda of the meeting of the European Central Bank on Thursday. The bank is confident that it will keep the policy open and is likely to postpone discussion of its reinvestment policy until December.

The euro started the week at 1.1511 dollar, after bouncing back to 1.1431 dollar on Friday. The dollar recovered 112.59 points after a rapid decline on the yen and it has changed little compared to a basket of currencies at 95.676. [USD/]

Sterling slowed to $ 1.3067 as the market waited for new developments on Brexit.

Prime Minister Theresa May will inform Parliament Monday that 95% of Britain's divorce agreement is now settled, but reiterates her opposition to the European Union's proposal to create a land border with Ireland North.

In commodity markets, gold remained steady at $ 1,227.33 per ounce.

Oil prices remained stable on Monday, fueled by supply concerns before US sanctions against Iranian crude oil began, but hampered by increased drilling activity in the United States. [O/N]

Brent crude added 23 cents to 60.01 dollars a barrel, while US crude rose 26 cents to 69.38 dollars.