Stock markets around the world rose on Tuesday after Chinese GDP figures showed the economy grew 4.5 per cent in the first quarter - the lifting of Covid restrictions worked in firing the country back to strength. However, there was still concerning data from some US banks which has held back positivity.
The FTSE 100 was up 0.2 per cent while the DAX and CAC 40 rose 0.15 and 0.36 per cent, respectively in early trading. Yesterday, the S&P 500 and Nasdaq both finished 0.3 per cent higher. In Asia, the CSI 300 of domestically listed stocks closed 0.3 per cent higher as well. US markets are expected to open around the same levels later on today.
Data from China surprised economists who had predicted a 4 per cent increase leading to some optimistic trades being made. Shares also rose on the belief that there’s plenty more to come from the world’s second largest economy as the full effect of opening up feeds through. Commodity prices also rose on the news.
Despite positivity across the board, news from US banks was a little mixed. Some had share prices creeping slightly higher following positive results but others continued to struggle following the Silicon Valley Bank debacle. State Street was the biggest loser with its shares down 11.5 per cent after it announced customers took $26bn from its accounts and investment products.
Elsewhere, data from the UK this morning showed unemployment crept up slightly last month to reach 3.8 per cent but is still lower than it was before the pandemic. Nonetheless, there are some signs higher interest rates are starting to affect the economy, with the number of vacancies down by 47,000. However there are still 1.1mn jobs to go round, some 300,000 more than the same period in 2020. Earnings growth remained strong on a 12-month view so still has the potential to be inflationary.
The Bank of England, which meets in three weeks, probably won’t have seen enough in this to make their minds up but there’s more tomorrow with the inflation figures coming. Chinese GDP is all well and good but market moves will still be driven by rhetoric on inflation and interest rates on both sides of the Atlantic.
