China Growth Data Lifts Europe Shares, Oil and Metals
OREANDA-NEWS. July 18, 2014. Stocks rose in Europe after China reported economic growth figures that were slightly stronger than markets had expected, although the reaction in Asia was more muted.
The world's second largest economy expanded at a 7.5 percent annual pace in the second quarter, the statistics bureau said, just beating the 7.4 percent median forecast in a Reuters poll.
The numbers, which also helped push crude oil and some industrial metals higher, confirmed the economy had stabilized after a shaky start to the year though analysts said the pick-up was largely driven by government stimulus.
The pan-European FTSEurofirst 300 equity index was up 0.6 percent, buoyed by mining stocks which strengthened in anticipation of demand from China. [.EU]
"It confirms the trend we've seen from improving PMI data, and is in line with the idea of a pick-up in the global economy. That's positive for the mining sector," said James Butterfill, global equity strategist at Coutts.
The China data helped push Shanghai zinc and London aluminum close to their highest in more than a year.
MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.7 percent, however, and Tokyo's Nikkei share average ended 0.1 percent lower as investors took profit on Tuesday's gains. [.T]
"The GDP figure is in line with our expectation, but the underlying momentum and recovery is still at a fragile state, especially given the property market correction," said Chang Jian, a Hong Kong-based analyst at Barclays.
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