Slower Japanese growth weighs on markets
AP and AFPLONDON/HONG KONG--Weaker-than-expected economic growth in Japan weighed on markets Monday on what is a fairly light day on the global economic calendar.
August 13, 2013, 12:05 am TWN
The main economic indicator of the day was the 2.6-percent annualized second-quarter growth rate recorded in Japan, the world's third-largest economy. The number was below the 3.8-percent rate recorded in the first quarter and the 3.6 percent predicted by analysts and dented sentiment around the world.
Investors are concerned that the big monetary stimulus that is being pursued by the government may not be reaping the rewards hoped for. Japan is trying to come out of a two-decade economic stagnation.
The slower growth could make it difficult for Japanese Prime Minister Shinzo Abe to carry out plans to raise the sales tax by 3 percentage points in April to improve public finances. The tax is now 5 percent.
Following the Japanese news, stocks in Europe and Wall Street futures drifted lower amid a dearth of economic data.
Britain's FTSE 100 shed 0.3 percent to 6,566 while Germany's DAX fell 0.8 percent to 8,271. The CAC-40 in France was 0.4 percent lower at 4,059.
On Wall Street, Dow futures were pointing to a 0.4-percent fall at the open while the broader S&P futures showed a 0.5-percent retreat. Last week, U.S. stocks suffered their worst week since June amid worries over when the U.S. Federal Reserve will start to reduce its monetary stimulus. Recent comments from a raft of Fed officials have indicated that it may start as soon as September.
This week's U.S. economic data, including retail sales figures for July, will be assessed in the context of when the Fed will begin the so-called tapering.
In Europe, the main point of interest will be Wednesday's second-quarter economic growth figures for the 17-country eurozone. Most analysts think that the region will post modest growth, which will mean it emerged from recession.