Oct 21, 2014 7:55 AM
China relief helps shore up markets
The Associated Press
LONDON (AP) European stocks rebounded Tuesday after figures showed China's economic growth slowed less than feared. U.S. shares were poised to make further gains at the open too amid further signs that markets have found a surer footing.
KEEPING SCORE: European stock markets largely recouped the previous day's losses. The FTSE 100 index of leading British shares up 0.9 percent at 6,323 while Germany's DAX rose 1.4 percent to 8,843 and the CAC-40 in France spiked 1.7 percent to 4,058. Futures pointed to gains on Wall Street, with the Dow Jones industrial average and the S&P 500 index expected to rise 0.6 percent at the open.
CHINA RELIEF: The world's second biggest economy was the main focus of attention in financial markets as traders assess whether the recent weakness in stock markets would represent a more substantial correction. Chinese growth fears have been one of the reasons why markets have been volatile. In the event, the news that China's economy expanded by 7.3 percent in the third quarter from a year earlier, helped ease concerns. Though down from the previous quarter's 7.5 percent tick, some analysts had expected a more marked slowdown to 6.9 percent. However, the modest deceleration is unlikely to convince China's leaders to embark on another stimulus.
THE QUOTE: "After last week's volatility in the financial markets, the last thing investors needed was bad news out of China," said Neil MacKinnon, global macro strategist at VTB Capital. "In the event, the latest GDP data just published for China did not provide any upsets."
FOCUS ON US HOUSING: The U.S. has also been in focus over the past couple of weeks and traders will be monitoring existing home sales data for September soon after the markets open. Most economists expect a snapback following last month's surprise 1.8 percent decline.
EURO FALL RESUMES: Speculation that the European Central Bank will embark on a new ambitious stimulus program involving the purchase of corporate bonds weighed on the euro. Europe's single currency was down 0.3 percent at $1.2753, prompting talk that the currency would resume its drift lower. The euro has been in retreat for much of this year as the ECB has cut interest rates and backed further stimulus to help shore up the eurozone economy and to prevent prices from falling.
ASIA'S DAY: Japan's Nikkei 225 was down 2.0 percent at 14,804.28 following a 4 percent surge on Monday fueled by expectations of government pension fund buying of shares. Hong Kong's Hang Seng added 0.1 percent to 23,088.58 while China's Shanghai Composite slipped 0.7 percent to 2,339.66. Australia's S&P/ASX 200 rose 0.1 percent to 5,325. Seoul's Kospi dropped 0.8 percent to 1,915.28.
ENERGY: The recent plunge in oil prices is sharpening concerns over the global economy but energy trading was relatively subdued Tuesday. Benchmark U.S. crude was up 18 cents to $82.09 a barrel in electronic trading on the New York Mercantile Exchange.