BEIJING (AP) – Asian stock markets were mixed Tuesday after China reported weak July consumer and business activity and its central bank cut a key interest rate to shore up the struggling economy.
Shanghai and Hong retreated while Tokyo and Sydney gained. Oil prices rose.
The Shanghai Composite Index lost 0.1 per cent to 3,174.59 after growth in Chinese consumer spending, factory output and investment slowed more than expected. The People’s Bank of China cut its interest rate on one-week loans to banks. The Hang Seng in Hong Kong fell 1 per cent to 18,584.42.
“Policymakers are starting to hit the panic button,” said Stephen Innes of SPI Asset Management in a report.
The Nikkei 225 in Tokyo gained 0.8 per cent to 32,315.61 and Sydney’s S&P-ASX 200 rose 0.6 per cent to 7,320.60.
Korean markets were closed for a holiday. New Zealand gained while Singapore and Jakarta declined.
Chinese leaders are trying to shore up flagging economic growth without resorting to an across-the-board stimulus they worry will push up debt they think is already dangerously high.
Official data Tuesday showed growth in retail sales declined to 2.5 per cent over a year earlier in July from the previous month’s already low 3.1 per cent. Growth in factory output and investment also decelerated despite promises by the ruling Communist Party to support entrepreneurs.
Economic growth slid to 0.8 per cent over the previous quarter in the three months ending in June from the January-March period’s 2.2 per cent.
On Wall Street, the benchmark S&P 500 index gained 0.6 per cent to 4,489.72 on Monday ahead of an update on US retail spending that traders hope will help to avert a possible recession.
The Dow Jones Industrial Average edged up 0.1 per cent to 35,307.63. The Nasdaq composite gained 1.1 per cent to 13,788.33.
US Steel jumped 36.8 per cent and the steelmaker said it rejected a buyout offer from Cleveland-Cliffs and that it has received others. Cleveland-Cliffs rose 8.8 per cent after it said it offered more than USD7 billion and was ready to move on a deal immediately.
Nikola sank 6.7 per cent. The zero-emission truck company recalled more than 200 of its electric vehicles after an investigation indicated a problem with a component in the battery pack could be the cause of an earlier fire. It earlier suggested foul play could be at play in the truck fire at its headquarters.
The S&P 500 has retrenched by 2.2 per cent in August after soaring 19.5 per cent through the first seven months of the year.
Critics say Wall Street too quickly latched onto the belief that inflation was under control and the economy could avoid a recession.
Consumer inflation edged up to 3.2 per cent in July from the previous month’s 3 per cent. That is down from last year’s peak above 9 per cent but still higher than the Federal Reserve’s 2 per cent target.
On Tuesday, the US government will report monthly retail sales. Economists say it is one of the week’s most important reports. They expect it to show growth accelerated to 0.4 per cent in July from 0.2 per cent in June.
On Wednesday, the Fed releases minutes of its latest board meeting. At that meeting, the US central bank’s main interest rate was raised to the highest level in more than two decades.
Traders broadly expect the Fed to hold rates steady at its next meeting in a little more than a month, according to data from CME Group. They also have some bets saying the Fed will begin cutting rates early next year.
In energy markets, benchmark US crude gained 8 cents to USD82.59 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 68 cents on Monday to USD82.51. Brent crude, the price basis for international oil trading, gained 11 cents to USD86.32 per barrel in London. It lost 60 cents the previous session to USD86.21.
The dollar declined to JPY145.46 from Monday’s JPY145.52. The euro gained to USD1.0916 from USD1.0904.