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Daily Scan: Chinese shares rebound; Canada elects new PM

By NexChange
Capital Markets

Updated throughout the day

October 20

Good evening everyone. A weird combo of stimulus bets, services sector growth, and margin lending increases helped Chinese shares out of their rut Tuesday with the Shanghai and Shenzhen Composites ending the session up 1.4% and 1.97%, respectively. Hong Kong however was a lot more subdued with both the Hang Seng and the Hang Seng China Enterprises Index tanking 0.37%. As for the rest:

Nikkei 225: +0.42%
Straits Times Index: +0.09%
Kospi: +0.45%

The European markets meanwhile seem to have taken a hit largely thanks to the China-fueled commodity rout. The FTSE 100 is currently down 0.1%, the DAX down 0.2%, and the CAC down 0.3%.

Here’s what else you need to know:

Canadian liberals make shock election win. Canada's Liberal leader Justin Trudeau rode a late surge to a stunning majority election victory on Monday, toppling Prime Minister Stephen Harper's Conservatives with a promise of change and returning a touch of glamor, youth, and charisma to Ottawa. Reuters

Moody’s: Gulf states to run deficits in 2015-2016. They may be late for the “low oil is bad for the Gulf” train, but ratings agency Moody’s sure makes up for it with a little bit of shock and awe. The agency says that Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE – which all ran surpluses from 2010 to 2014 – are set to run a near 10% deficit in 2015 and 2016. Financial Times (paywall)

Divided families reunite in North Korea. Hundreds of South Koreans have begun meeting family members in the North in a rare reunion event for families separated by the Korean War. The reunion, comprising a series of meetings over a week, is being held at a Mount Kumgang resort, at the border. BBC

Chinese new home sales disappoint. Expecting a “golden September,” developers and investors were instead met with a broad drop in home prices in China’s tier-1 cities. Compared to August, primary home prices in Shanghai fell 0.9% in September, while Shenzhen and Guangzhou did far worse by tanking 3.5% and 5.6%, respectively. Beijing home prices continued to post gains, climbing 7.1% in September from the month before. SCMP (paywall)

China to invest billions on British nuclear plant. In a landmark deal set to be announced on Wednesday, China is to take on a 33.5% share in the proposed $37 billion, French-led Hinkley Point nuclear power station in Somerset. The deal, which took months of negotiations with France’s EDF, is set to be Chinese Premier Xi Jinping’s “commercial centerpiece” during his visit this week. Financial Times (paywall)

U.S. Treasury: Chinese capital outflows surged nearly 1000%. In its latest report to congress, the U.S. Treasury Department said that capital outflows from mainland China surged to $250 billion in the first half of the year, a massive jump from the $26 billion posted in the same period in 2014, adding that in July alone outflows may have reached $80 billion, and may have spiked as high as $200 billion in August. U.S. Treasury

Deutsche accidentally paid hedge fund $6 billion.

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