World Markets Lackluster as China’s Growth Slows
Business Roundup for Friday, January 17.
World markets were lackluster Monday after a report showed China’s economic growth slowing and poor earnings from Germany’s largest bank.
Trading on Wall Street will remain closed on Monday for Martin Luther King Day.
Analysts said the U.S. corporate reporting season will be in focus when Wall Street reopens Tuesday after some disappointing earnings so far. Markets will also be cautious ahead of the Federal Reserve’s next meeting on Jan 29.
China’s economy grew 7.7 percent in the quarter through December, down from 7.8 percent the previous quarter. For the full year, the economy expanded 7.7 percent, tying 2012 for the weakest performance since the 1990s.
China’s growth is far stronger than the United States, Japan or Europe. But an unexpectedly abrupt decline from the double digit rates of the previous decade has complicated the ruling Communist Party’s plans to promote more sustainable growth based on domestic consumption and reduce reliance on trade and investment.
“The ‘boom’ is ending, but sustained demand is just as important,” said Evan Lucas, market strategist with IG in Melbourne, Australia.
By midafternoon in Europe, Britain’s FTSE 100 was flat at 6,831.42 and France’s CAC 40 shed 0.2 percent to 4,319.37. Germany’s DAX dropped 0.4 percent to 9,700.85, led by a 5 percent fall in Deutsche Bank, which said it would book an unexpected loss in the fourth quarter. The report caused shares in financial companies across Europe to underperform the wider market.
In Asia, Japan’s Nikkei 225 sank 0.6 percent to 15,641.68 and China’s Shanghai Composite index slipped 0.7 percent to 1,991.25. Hong Kong’s Hang Seng shed 0.9 percent to 22,928.95. Australia’s S&P/ASX 200 was down 0.2 percent at 5,295.
Benchmark crude for February delivery was flat at $93.96 in electronic trading on the New York Mercantile Exchange. The contract rose 41 cents to settle at $94.37 on Friday.
The euro rose 0.2 percent to $1.3558 while the dollar fell 0.2 percent against the Japanese yen, to 104.06 yen.
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