London (AFP) – Major stock markets shrugged off Monday’s weak data from China as they kept their focus on corporate earnings. However, oil prices fell as markets were unimpressed with a pledge by China’s finance minister to boost the world’s second-biggest economy.
One of the week’s key events, meanwhile, occurs Thursday when the European Central Bank is expected to lower interest rates again as anxiety about inflation in the eurozone fades and concerns over sluggish growth mount. The euro traded lower against the dollar and pound on Monday. Wall Street pushed higher from record highs set Friday on strong US company earnings that added to positive sentiment over the world’s biggest economy ahead of the country’s presidential election next month.
But with few corporate earnings or data releases on Monday, there was little driving trading, according to Briefing.com analyst Patrick O’Hare. “It’s like participants are choosing what is thought to be the safest trade, not wanting to be out of the stock market but not wanting to chase it either without a clear-cut catalyst to bolster their conviction,” he said. The next big batch of corporate earnings reports is on Tuesday, when Goldman Sachs, Citi, and Bank of America release their third-quarter figures.
Europe’s main equity markets closed higher, with Frankfurt reaching a record finish. However, oil prices slid as concerns about the outlook for China’s economy offset fears of escalating conflict in the Middle East, analysts said. “The devil is always in the detail, and once again China has glossed over how it intends to accelerate economic growth,” noted AJ Bell investment director Russ Mould.
China’s finance minister Lan Fo’an on Saturday said the country would issue special bonds to bolster banks, signaling an impending spending spree to shore up the property market and ease local government debt. Harry Murphy Cruise, an economist at Moody’s Analytics, stated that the announcement “ticked most of the right boxes, but it lacked detail on the scale and scope of new spending,” adding, “we expect more supports to be announced through the remainder of the year.” Authorities have been seeking to boost domestic activity and shore up China’s ailing property sector.
In recent weeks, Chinese policymakers have unveiled a string of measures to stimulate activity and spur household consumption. Following the latest announcement, official data on Sunday showed that China’s consumer inflation rate slowed in September, indicating that demand remains fragile. Separate figures released Monday revealed that China’s export growth slowed sharply in September while imports remained sluggish.
Investors are eyeing key Chinese data later in the week, including on retail sales, trade, and economic growth. “While the full effects of the recent economic measures may not be immediately evident in the upcoming data releases, these figures will provide more insight into how China’s economy is faring and whether additional actions may be necessary,” said Tony Sycamore, an analyst at the IG trading group.
– Key figures around 1530 GMT –
New York – Dow: UP 0.3 percent at 42,978.06 points
New York – S&P 500: UP 0.5 percent at 5,845.81
New York – Nasdaq Composite: UP 0.6 percent at 18,444.55
London – FTSE 100: UP 0.5 percent at 8,292.66 (close)
Paris – CAC 40: UP 0.3 percent at 7,602.06 (close)
Frankfurt – DAX: UP 0.7 percent at 19,508.29 (close)
Shanghai – Composite: UP 2.1 percent at 3,284.32 (close)
Hong Kong – Hang Seng Index: DOWN 0.8 percent at 21,092.87 (close)
Tokyo – Nikkei 225: Closed for a holiday
Euro/dollar: DOWN at $1.0914 from $1.0941 on Friday
Pound/dollar: DOWN at $1.3050 from $1.3068
Dollar/yen: UP at 149.83 yen from 149.09 yen
Euro/pound: DOWN at 83.62 pence from 83.70 pence
West Texas Intermediate: DOWN 2.0 percent at $74.09 per barrel
Brent North Sea Crude: DOWN 1.9 percent at $77.58 per barrel
burs-rl/js
© 2024 AFP
