AP – Global stock markets followed Wall Street higher yesterday after China reported 6.1 per cent economic growth in 2019 and Washington and Beijing signed an interim trade agreement.
London and Frankfurt opened higher, while Shanghai, Tokyo and Hong Kong advanced after the United States (US) benchmark S&P 500 index hit a new high and Google parent Alphabet passed USD1 trillion in market value, joining Amazon, Apple and Microsoft in the USD1 trillion club.
China’s economic growth was the lowest since 1990 but forecasters pointed to improved activity in December. They said on Wednesday’s signing of a truce in the war over Beijing’s technology ambitions and trade surplus might help to revive consumer and business confidence.
Investors are “finding inspiration” from the Wall Street rally while they try to figure out “where to from here” in US-Chinese trade relations, said Jingyi Pan of IG in a report.
“The market sentiment looks to have only improved into the end of the week,” said Pan.
In early trading, London’s FTSE 100 added 0.5 per cent to 7,646.88 and Germany’s DAX gained 0.7 per cent to 13,532.09. France’s CAC 40 rose 0.8 per cent to 6,087.69.
On Wall Street, the S&P 500 index future rose 0.2 per cent and that for the Dow Jones Industrial Average was 0.3 per cent higher. That was after the S&P 500 index climbed 0.8 per cent on Thursday and the Dow rose 0.9 per cent. The Nasdaq composite gained 1.1 per cent.
Chinese economic growth held steady in the three months ending last December at the previous quarter’s rate of six per cent over a year earlier.
Monthly activity indicators showed “industry and investment improved sharply last December,” William Adams of PNC Financial Services Group said in a report.
Forecasters said the US-Chinese trade deal might help to reassure companies and consumers relations wouldn’t deteriorate further. Washington postponed planned tariff hikes on additional Chinese goods and Beijing promised to buy more American farm exports.
If the public believes the truce is genuine, “improved sentiment could also boost economic growth in the near-term,” said Adams.
In Asia yesterday, the Shanghai Composite Index rose one point to 3,075.50 and Tokyo’s Nikkei 225 gained 0.4 per cent to 24,041.26. Hong Kong’s Hang Seng gained 0.6 per cent to 29,056.42.
Seoul’s Kospi added 0.1 per cent to 2,250.57 while Sydney’s S&P-ASX 200 gained 0.3 per cent to 7,064.10.
India’s Sensex was 0.1 per cent higher at 41,992.28. New Zealand and Taiwan rose while Singapore declined.
Benchmark US crude gained 15 cents to USD58.67 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 71 cents to USD58.52 on Thursday. Brent crude, used to price international oils, rose 22 cents to USD64.84 per barrel in London. It rose 62 cents the previous session to USD64.62.
The dollar advanced to JPY110.21 from Thursday’s JPY110.13. The euro edged up to USD1.1140 from USD1.1136.