Hong Kong (AFP) – Markets rose Tuesday as data showed China’s economic growth met expectations, while optimism that governments will hammer out deals to avoid the worst of Donald Trump’s tariff threats provided support.
Beijing said gross domestic product expanded 5.2 percent in April-June thanks to a surge in exports as businesses front-loaded shipments ahead of the US president’s stiff levies, and after the superpowers agreed to work on a long-term pact. While the reading was slightly slower than the first quarter, it was in line with forecasts in an AFP survey and comes after figures on Monday showed exports soared more than expected in June, including a strong recovery in goods sent to the United States. Industrial output came in above expectations.
However, Tuesday’s reports showed efforts to boost consumer activity continue to fall flat, with retail sales expanding 4.8 percent last month, well below estimates in a Bloomberg study and highlighting the work leaders face in kickstarting the economy. “Recent efforts to boost spending, such as the broadening of the consumer goods trade-in scheme earlier this year, did temporarily lift retail sales,” said Sarah Tan, an economist at Moody’s Analytics. “However, this support proved unsustainable, with funding reportedly drying up in several provinces. The scheme’s limitations highlight the need for policymakers to address the deeper structural challenges behind consumer caution.”
China’s recovery has been hamstrung by a bruising trade war with the United States, driven by Trump’s sweeping tariffs, though the two de-escalated their spat with a framework for a deal at talks in London last month. But observers warn of lingering uncertainty. And the US president upped the ante Monday, warning Russia’s trading partners — which include China — that he will impose tariffs reaching 100 percent if Moscow fails to end its war on Ukraine within 50 days.
Lynn Song, chief economist for Greater China at ING, said: “China remains on track to hit this year’s growth target, though a slowdown could be on the way.” Still, after a wobble in the morning, Hong Kong rose more than one percent while Tokyo, Sydney, Seoul, Singapore, Taipei, Wellington, Mumbai, and Jakarta were also in positive territory along with London, Frankfurt, and Paris. Shanghai and Manila sank.
US futures rallied following news that tech titan Nvidia will resume sales of its H20 artificial intelligence chips to China, after Washington pledged to remove licensing curbs that had put a stop to exports. Trump also said Monday he will impose antidumping duties on most imports of fresh tomatoes from Mexico, with the US Commerce Department accusing its neighbor of engaging in unfair trade. That came after he said he would hit the country and the European Union with 30 percent levies, having announced a slew of measures against key partners last week if deals are not struck by August 1. However, analysts said investors viewed the warnings as negotiating ploys rather than a genuine move, citing previous threats that were later rowed back.
The mixed performance in Asian markets followed a healthy day on Wall Street, where the Nasdaq hit another record high. Bitcoin retreated after hitting a record high above $123,200 on Monday thanks to optimism over possible regulatory changes for crypto assets in the United States.
– Key figures at around 0810 GMT –
Tokyo – Nikkei 225: UP 0.6 percent at 39,678.02 (close)
Hong Kong – Hang Seng Index: UP 1.6 percent at 24,590.12 (close)
Shanghai – Composite: DOWN 0.4 percent at 3,505.00 (close)
London – FTSE 100: UP 0.1 percent at 9,004.23
Euro/dollar: UP at $1.1690 from $1.1670
Pound/dollar: UP at $1.3447 from $1.3428
Dollar/yen: DOWN at 147.65 yen from 147.77 yen
Euro/pound: UP at 86.94 pence from 86.88 pence
West Texas Intermediate: DOWN 0.9 percent at $66.37 per barrel
Brent North Sea Crude: DOWN 0.8 percent at $68.66 per barrel
New York – Dow: UP 0.2 percent at 44,459.65 (close)
© 2024 AFP
