Global stocks up as China growth slows as expected
Friday 13 July 2012
Global stock markets were higher Friday after China said its economy grew in the second quarter at its slowest pace since 2009, numbers in line with analyst expectations.
In early trading in Europe, Britain's FTSE 100 was up 0.4 per cent at 5,633.02. France's CAC-40 gained 0.2 per cent to 3,140.46, while Germany's DAX advanced 0.5 per cent to 6,449.15.
China's gross domestic product expanded 7.6 per cent in the April to June period from the same period a year earlier, down from 8.1 per cent growth in the first quarter. China also reported that retail sales and factory output growth slowed in June.
Equities in Asia had mostly fallen the previous few days amid speculation that China's growth may have slowed more than the consensus 7.6 per cent forecast. Some analysts say expected interest rate cuts and fiscal stimulus spending by China should spur lending, investment and stronger economic growth in the second half of the year.
"All this should be positive for GDP growth in the next few quarters," said Mark Williams, chief Asian economist with Capital Economics. "Much of the impact of stronger lending over the next few months will be felt in 2013."
Williams said he expects China's economy to grow 8 per cent this year and next.
Japan's Nikkei 225 index was up 0.1 per cent to 8,724.11 while Hong Kong's Hang Seng rose 0.4 per cent at 19,094.40.
South Korea's Kospi gained 1.5 per cent to 1,812.89. Australia's S&P/ASX 200 advanced 0.4 per cent to 4,082.20 and China's Shanghai Composite was steady at 2,185.90.
Other analysts expect Chinese growth to continue to slow as consumer demand fails to keep up with industrial production capacity. China's GDP will likely average about 6 per cent growth a year during the next five to 10 years, said Anil Gupta, a professor at the Smith School of Business at the University of Maryland.
"The days of 8 per cent GDP growth in China are over," said Gupta, who is a visiting professor at the INSEAD business school in Singapore. "There is massive overcapacity in a lot of industries such as cement, steel and autos because the government kept providing cheap capital and everybody assumed that the 8 plus per cent growth rate will go on forever."
On Thursday, the Dow Jones industrial average closed down 0.3 per cent at 12,573.27. The Standard & Poor's 500 fell 0.5 per cent at 1,334.76. The Nasdaq composite was down 0.8 per cent at 2,866.19.
Benchmark oil for August delivery was up 35 cents at $86.43 a barrel in electronic trading on the New York Mercantile Exchange. Crude rose 27 cents to settle at $86.08 on Thursday in New York.
In currencies, the euro was little changed at $1.2199 from $1.2195 late Thursday in New York. The dollar was steady at 79.27 yen from 79.31 yen.
- 1 Half of young women unable to ‘locate vagina’ and 65% find it difficult to say the word
- 2 Emma Watson on Jennifer Lawrence naked photo leak: 'Even worse than seeing women's privacy violated is reading the comments'
- 3 Saudis risk new Muslim division with proposal to move Mohamed’s tomb
- 4 A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
- 5 Mexican woman becomes world’s 'oldest person' at 127
Perez Hilton apologises for publishing Jennifer Lawrence naked 4Chan photos
Jennifer Lawrence 'nude photo hacker' claims there are hundreds more celebrity images to come
Victoria Justice on naked photo leak: 'Let me nip this in the bud right now – pun intended'
Ariana Grande nude photos leak: Pictures are completely fake, say representatives
Saudis risk new Muslim division with proposal to move Mohamed’s tomb
Rotherham child sex abuse scandal: Labour Home Office to be probed over what Tony Blair's government knew - and when
What do immigrants really think of Britain? Polish immigrant's Reddit post goes viral
Ashya King: Parents of five-year-old boy refused permission to visit him in hospital and denied bail at Spanish court
With Douglas Carswell joining Ukip, my party has taken another giant step forward
When elitism grips the top of British society to this extent, there is only one answer: abolish private schools
Ashya King: 'Cruel NHS has not given us the treatment we need', says father of five-year-old with brain tumour who fled to Spain
iJobs Money & Business
£55000 - £65000 per annum: Harrington Starr: A Global Financial Service Organi...
£60000 - £70000 per annum: Harrington Starr: A prestigious leading professiona...
£40000 - £50000 per annum: Harrington Starr: A Global Financial Service Organi...
£50000 - £70000 per annum: Harrington Starr: One of the global leaders in prov...