Global equities are generally down as Chinese growth data disappoint
Global stocks were mostly down on Monday after China said its economy grew at a meager annual rate of 4.9% in July-September.
The German DAX fell 0.5% to 15,506.11 and the CAC 40 in Paris fell 0.8% to 6,676.21. The UK FTSE 100 lost 0.2% to 7,216.79.
The future of Dow industrials was down 0.2% while the S&P 500 future was down 0.3%.
The Shanghai Composite Index edged down 0.1% to 3,568.14, while the Hang Seng in Hong Kong recovered from previous losses, gaining 0.3% to 25,409.75.
Chinese growth is under pressure as the government seeks to limit energy use and reduce financial risks associated with reliance on debt-fueled real estate developments. Shortages of computer chips and other components due to the pandemic are hurting manufacturing.
The annual growth rate of 4.9% was slightly lower than forecast and compared to an expansion of 7.9% in the April-June quarter, which was exaggerated by the slowdown in 2020.
“Growth prospects have weakened due to various headwinds,” Oxford Economics’ Tommy Wu and Louis Kuijs said in a report. They predict that growth will “slow significantly” in the current quarter.
New Zealand’s benchmark edged down 0.1% after figures showed prices jumped 4.9% in July-September from a year earlier. This is the fastest rate of inflation since the start of 2011.
The figures add to the pressure on New Zealand’s central bank to continue raising rates after raising the benchmark rate earlier this month for the first time in seven years by a quarter point to 0.5%.
Investors remain concerned that price increases in many countries could lead to âstagflationâ or economic stagnation coupled with high inflation.
Other regional shares also fell. Tokyo’s Nikkei 225 index fell 0.2% to 29,025.46. In Seoul, the Kospi lost 0.3% to 3,006.68.
The S & P / ASX 200 in Sydney rose 0.3% to 7,381.10. India’s benchmark index rose 0.9% to 61,879.24.
Wall Street added to its recent gains on Friday, with the benchmark S&P 500 posting its best week since July.
The S&P 500 rose 0.7%, while the Dow Jones Industrial Average rose 1.1% and the Nasdaq composite rose 0.5%.
The company’s positive earnings were consistent with a report showing people spent significantly more at U.S. retailers in September than analysts had expected.
The S&P 500 is back to less than 1.5% of its all-time high after a few volatile weeks, as concerns over stubbornly high inflation, reduced support to markets from the Federal Reserve and a slowing economy caused drop stock prices.
Early indicators from earnings reports have been encouraging, with companies posting higher-than-expected earnings. This is crucial, as rising interest rates have raised concerns that stock prices have become too expensive relative to earnings.
Treasury yields rose on the back of the much stronger than expected retail sales report. The yield on the 10-year note climbed to 1.60% Monday morning from 1.57% Friday night.
The benchmark US oil price rose 90 cents to $ 83.18 per barrel in electronic trading on the New York Mercantile Exchange. It jumped 1.2% to $ 82.28 a barrel on Friday, continuing a powerful run that has pushed it up more than 70% this year and stoked concerns about high inflation.
Brent, the world’s benchmark for crude, climbed 59 cents to $ 85.45 a barrel. It jumped 1% on Friday, although the price of US natural gas fell 4.9%.
The US dollar climbed to 114.32 Japanese yen from 114.22 yen on Friday night. The euro fell to $ 1.1584 from $ 1.1602.