Markets drift despite more positive China news
AP and AFPLONDON/HONG KONG--Another round of largely better than expected Chinese economic data failed to lift the lackluster mood in financial markets on Friday amid the traditional summer lull in trading activity.
August 10, 2013, 12:08 am TWN
Figures showed inflation in July steady at an annual rate of 2.7 percent. That was below market expectations for a modest increase to 2.8 percent. Meanwhile, industrial production rose 9.7 percent in the year to June, ahead of expectations for a 9 percent increase. The only modest disappointment was the news that retail sales grew 13.2 percent in July from a year earlier, slightly slower than June's growth rate.
Overall, analysts said the figures added weight to the argument that the recent soft patch in the world's second-largest economy may have come to an end. However, market reaction was fairly muted, as stocks had rallied already on Thursday after strong Chinese trade numbers.
“While we didn't get the reaction to the data that we saw yesterday, following the trade balance figure, I'd say the data out of China over night was actually quite positive,” said Craig Erlam, market analyst at Alpari.
In Europe, the FTSE 100 index of leading British shares was up 0.2 percent at 6,544 while Germany's DAX fell 0.2 percent to 8,303. The CAC-40 in France was 0.1 percent lower at 4,059.
Wall Street was poised for a subdued opening, with both Dow futures and the broader S&P 500 futures 0.4 percent lower.
With the scheduled economic news on the light side, analysts think U.S. markets may drift in the run-up to the weekend. Trading levels in the U.S. in particular often dry up in the latter part of August and only pick up again once traders return to their desk following the Labor Day holiday in early September.
“Bereft of economic news, U.S. markets may struggle,” said Chris Beauchamp, market analyst at IG.
In Asia, shares were mixed Friday after China posted upbeat factory data that hit a five-month high in July, bolstering the outlook for the world's second-biggest economy after persistent signs of sluggish growth.
Tokyo ended flat, edging up 9.63 points to 13,615.19, with heavyweight Nikon plunging 14.29 percent on a big drop in the camera giant's quarterly profit as digital camera sales slumped.
Seoul shed 0.17 percent, or 3.26 points to 1,880.71 and Sydney slipped 0.19 percent, or 9.6 points, to 5,055.2 after Australia's central bank trimmed its near-term growth forecast for the mining-powered economy.
The Reserve Bank of Australia scaled back its forecast until the end of this year by 0.25 percent to 2.25 percent, and said it expected only a modest pick-up to 2.5 percent by mid-2014.
Hong Kong gained 0.7 percent, or 151.68 points to 21,807.56 and Shanghai added 0.36 percent, or 7.34 points, to 2,052.24 after China reported industrial growth for July reached a five-month high.
Gold was at US$1,312.40 at 0834 GMT compared with US$1,290.50 late Thursday.
In other markets:
— Wellington fell 0.17 percent, or 7.74 points, to 4,533.64. Contact Energy was off 0.56 percent at NZ$5.32, Air New Zealand lost 1.42 percent to NZ$1.39 while Telecom Corp. was steady at NZ$2.30.
— Bangkok dropped 1.03 percent or 14.91 points to close at 1,432.25.
Coal producer Banpu rose 1.75 percent or 4.00 baht to finish at 233.00 baht but energy giant PTT PLC lost 0.61 percent or 2.00 baht to close at 328.00.
— Singapore, Mumbai, Jakarta, Kuala Lumpur and Manila were closed for a public holiday.