World shares mostly lower as Chinese growth data disappoints

Elaine Kurtenbach

AP – World shares were mostly lower yesterday after China reported its economy grew at a meager 4.9-per-cent annual pace in July-September.

Germany’s DAX declined 0.5 per cent to 15,506.11 and the CAC 40 in Paris gave up 0.8 per cent to 6,676.21. Britain’s FTSE 100 lost 0.2 per cent to 7,216.79.

The future for the Dow industrials was 0.2 per cent lower while the future for the S&P 500 lost 0.3 per cent.

The Shanghai Composite index inched 0.1 per cent lower to 3,568.14, while the Hang Seng in Hong Kong recovered from earlier losses, gaining 0.3 per cent to 25,409.75.

Chinese growth is under pressure as the government seeks to limit energy use and reduce financial risks from reliance on debt-fueled property developments. Shortages of computer chips and other components due to the pandemic are hurting manufacturing.

The 4.9-per-cent annual pace of growth was slightly below forecasts and compared with a 7.9-per-cent expansion in the April-June quarter, which was exaggerated by the downturn in 2020.

People stand by an electronic stock board of a securities firm in Tokyo. PHOTO: AP

“The growth outlook has weakened due to the various headwinds,” Tommy Wu and Louis Kuijs of Oxford Economics said in a report. They forecast that growth would “slow significantly” in the current quarter.

New Zealand’s benchmark edged 0.1 per cent lower after figures showed prices jumped 4.9 per cent in July-September from a year earlier. It was the fastest pace of inflation since early 2011.

The figures add to pressure on New Zealand’s central bank to keep hiking rates after it raised the benchmark rate earlier this month for the first time in seven years by a quarter point to 0.5 per cent.

Investors remain uneasy that price increases in many countries could lead to “stagflation”, or a stagnating economy coupled with high inflation.

Other regional shares also fell. Tokyo’s Nikkei 225 index gave up 0.2 per cent to 29,025.46. In Seoul, the Kospi lost 0.3 per cent to 3,006.68. The S&P/ASX 200 in Sydney rose 0.3 per cent to 7,381.10. India’s benchmark rose 0.9 per cent to 61,879.24.

On Friday, Wall Street added to its recent gains, with the benchmark S&P 500 posting its best week since July.

The S&P 500 rose 0.7 per cent, while the Dow Jones Industrial Average rose 1.1 per cent and the Nasdaq composite gained 0.5 per cent.

Positive company earnings dovetailed with a report showing people spent much more at United States (US) retailers in September than analysts had expected.

The S&P 500 is back within 1.5 per cent of its all-time high after a shaky few weeks as worries about stubbornly high inflation, reduced support for markets from the Federal Reserve and a slowing economy knocked stock prices around.

Early indicators from earnings reports have been encouraging, with companies showing stronger profits than expected.

That’s crucial after climbing interest rates raised worries that stock prices had grown too expensive relative to profits.

Treasury yields rose following the much stronger-than-expected report on retail sales. The yield on the 10-year note climbed to 1.60 per cent early yesterday from 1.57 per cent
late Friday.

The price of benchmark US oil rose 90 cents to USD83.18 per barrel in electronic trading on the New York Mercantile Exchange. It surged 1.2 per cent to USD82.28 per barrel on Friday, continuing a powerful run that has sent it up more than 70 per cent this year and fanned worries about high inflation.

Brent, the global benchmark for crude, climbed advanced 59 cents to USD85.45 per barrel. It jumped one per cent on Friday, though the price of US natural gas fell 4.9 per cent.

The US dollar rose to JPY114.32 from JPY114.22 late Friday. The euro fell to USD1.1584 from USD1.1602.