LONDON: Global stocks fell on Tuesday after disappointing data from China deepened concerns over the state of the world’s second-largest economy.
Markets were down across Wall Street, where pessimism surrounding the Chinese figures offset strong US retail sales for July.
European markets closed in the red following a largely negative session in Asia as Tokyo finished up but Hong Kong shed 1.0 percent and Shanghai lost 0.1 percent.
The US retail sales data kept Wall Street stocks “heavy” as it increased the likelihood of the Federal Reserve hiking interest rates again, said Edward Moya, senior market analyst at OANDA.
“There isn’t enough growth in China and, in the market’s mind, there is perhaps too much growth in the US for the Fed’s liking,” added Briefing.com analyst Patrick O’Hare.
“It is adding to the uncertainty of what comes next, and that uncertainty is adding to the August inclination to take some money off the table.”
Chinese data released Tuesday showed slowing growth in July retail sales, while industrial production fell short of analyst expectations and unemployment crept up.
Worries have grown over the heavily indebted property sector and the future of massive developer Country Garden, which has warned of huge losses.
The central bank also cut a key interest rate in a bid to boost growth, in a sign the country’s post-Covid rebound is stuttering.
The measure “is unlikely to have much lasting benefit in the absence of government spending”, noted Stephen Innes of SPI Asset Management.
It “could even be perceived as unfavourable in the sense that policymakers are starting to hit the panic button”.
Beijing also said it would stop reporting the youth unemployment rate, which hit a record 21.3 percent in June, prompting concerns over transparency.
“The lack of transparency continues to irk investors,” added Innes, noting that “growing concerns about Chinese property and the prospect of higher US rates have dampened risk appetite”.
‘China is struggling’
Oil prices sank again on Tuesday over fears of weakened demand from China, the world’s top crude importer.
The drop in copper and oil prices “reinforces the view that China is struggling, where private sector demand remains rather weak”, said City Index analyst Fawad Razaqzada.
On foreign exchange markets, the ruble was trading around 98 to the dollar after Russia hiked its key interest rate to 12 percent following an emergency central bank meeting to stem a slide in the currency.
On Monday, the ruble crashed past 100 to the dollar, its lowest level since March 2022 – following Russia’s invasion of Ukraine and the imposition of Western sanctions.
Elsewhere, the dollar was holding steady above 145 yen, its strongest level against the Japanese currency since November.
Key figures around 1530 GMT
New York - Dow: DOWN 0.7 percent at 35,069.61 points
London - FTSE 100: DOWN 1.6 percent at 7,389.64 (close)
Frankfurt - DAX: DOWN 0.9 percent at 15,767.28 (close)
Paris - CAC 40: DOWN 1.1 percent at 7,267.70 (close)
EURO STOXX 50: DOWN 1.0 percent at 4,288.57 (close)
Hong Kong - Hang Seng Index: DOWN 1.0 percent at 18,581.11 (close)
Shanghai - Composite: DOWN 0.1 percent at 3,176.18 (close)
Tokyo - Nikkei 225: UP 0.6 percent at 32,238.89 (close)
Euro/dollar: UP at $1.0929 from $1.0908 on Monday
Pound/dollar: UP at $1.2730 from $1.2686
Euro/pound: DOWN at 85.82 pence from 85.97 pence
Dollar/yen: DOWN at 145.42 yen from 145.50 yen
West Texas Intermediate: DOWN 1.9 percent at $80.97 per barrel
Brent North Sea crude: DOWN 1.6 percent at $84.84 per barrel
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