World shares mixed as China reports so-so economic data

BANGKOK (AP) — Shares rose in Europe after a mixed session in Asia yesterday as China reported a variety of data that painted a complicated picture of its recovery from the pandemic.

The passage of a USD1.9 trillion aid package for the United States (US) economy has added to investor confidence that the US and global economy will likely experience a strong recovery from the pandemic in the second half of the year but also potentially increase the rate of inflation.

Germany’s DAX climbed 0.3 per cent to 14,546.95 and the CAC 40 in Paris added 0.5 per cent to 6,075.54. Britain’s FTSE 100 was up 0.4 per cent at 6,789.86. US futures pointed to an upbeat start, with the contract for the S&P 500 up 0.3 per cent and that for the Dow industrials 0.4 per cent higher.

Markets got a mixed message from the data out of China, which has led the global recovery, re-opening earlier than other countries from coronavirus shut-downs that emerged in the central city of Wuhan in early 2020.

Retail sales jumped nearly 36 per cent year-on-year in January-February from a year earlier.

But the surge was mostly driven by strong demand for cars, catering and jewellery, suggesting Chinese consumers were splashing out during the Lunar New Year, ING economists said in a report.

The data were exaggerated by low base effects from the shutdowns last year, they said.

A currency trader works at the foreign exchange dealing room in Seoul. PHOTO: AP

Meanwhile, the jobless rate rose to 5.5 per cent from 5.2 per cent a year earlier, possibly affected by flare ups of coronavirus in some areas, analysts said.

“Travel restrictions weighed on retail sales but boosted industrial output and investment. We think activity will remain strong during the first half of this year, before giving way to a weaker second half,” Julian Evans-Pritchard of Capital Economics.

“Domestic policy support is being gradually withdrawn. And foreign demand for Chinese goods will drop back as vaccines start to reverse the recent shift in global consumption patterns,” he said.

The Shanghai Composite index fell one per cent to 3,419.95. Tokyo’s Nikkei 225 index edged 0.2 per cent higher, to 29,766.97 and the Hang Seng in Hong Kong climbed 0.3 per cent to 28,833.76.

In South Korea, the Kospi lost 0.3 per cent to 3,045.71. Sydney’s S&P/ASX 200 inched 0.1 per cent higher, to 6,773.00.

India’s Sensex lost 1.3 per cent to 50,127.98.

Investors will be watching this week for the outcome of a Federal Reserve policy meeting, which wraps up tomorrow.

Japan’s central bank will be issuing a policy update on Friday.

On Friday, a late-afternoon burst of buying helped nudge the S&P 500 0.1 per cent higher to 3,943.34, extending its winning streak to a fourth straight day.

The Dow Jones Industrial Average added 0.9 per cent, to 32,778.64, lifted by industrial stocks like Boeing and Caterpillar. The tech-heavy Nasdaq fell 0.6 per cent, to 13,319.86.

The Russell 2000 index of smaller company stocks advanced 0.6 per cent to 2,352.79. It ended the week 7.3 per cent higher, outpacing the S&P 500’s 2.6-per-cent gain for the week.

The bond market again was the dominant force in pulling tech stocks mostly downward, because as yields push interest rates higher, they make high-flying stocks look expensive.

After remaining stable for most of the week, the yield on the 10-year Treasury note jumped to 1.62 per cent from 1.52 per cent a day earlier. Investors had sold off stocks late last week after that yield crossed above the 1.60-per-cent mark. Yesterday, the 10-year Treasury was at 1.61 per cent.