SEOUL, South Korea (AP) – Global stock markets rose Tuesday, and Shanghai rebounded from a dramatic dive the day before, after China’s economic slowdown in the fourth quarter wasn’t as sharp as feared.
KEEPING SCORE: Europe started its day on a positive note, with Britain’s FTSE 100 up 0.4 percent at 6,609.96. France’s CAC 40 gained 0.4 percent to 4,414.24 while Germany’s DAX added 0.2 percent to 10,260.56. Wall Street was set for gains after a long weekend. Dow futures rose 0.3 percent to 17,484 and S&P 500 futures gained 0.3 percent to 2,019.50.
CHINA GDP: China’s economy expanded 7.4 percent last year, which was its weakest performance in 24 years, but fourth quarter growth of 7.3 percent was slightly higher than expected. China’s slowdown is partly a function of Beijing’s efforts to transform the economy, weaning it off overreliance on heavy industry and trade in favor of domestic consumption. But the transition has been buffeted by a range of problems, including a slumping property market and uneven exports. Mizuho Bank Ltd. said in a report that a pickup in service industries was an upbeat sign that offset slowing industries such as construction.
ANALYST’S TAKE: “With growth moderating in China, the next phase of the country’s economic prosperity is being mapped out through fiscal regulation and sustained growth targets,” said IG strategist Evan Lucas in a market commentary. “Those ideas mean the central government is also looking to moderate rampant speculation, encourage sustained growth for domestic demand and ensure private enterprise becomes more self-sufficient.”
GLOBAL GROWTH: The International Monetary Fund lowered its forecasts for global growth over the next two years, warning that persistent weakness in most major economies will outweigh the boost from lower oil prices. It cut the projections it issued in October by 0.3 percentage point each, predicting global growth at 3.5 percent this year and 3.7 percent in 2016. Markets were unruffled as the lower forecasts were expected.