Global Stock Markets Rise on Hopes for China’s Economic Growth

On Friday, many Asian and European stock markets saw gains after positive economic growth data from China exceeded expectations. Additionally, Chinese officials indicated support measures to strengthen the world’s second-largest economy.

In Europe, both Paris and Frankfurt posted gains during midday trading. This movement followed the European Central Bank's (ECB) recent decision to lower interest rates in the eurozone as inflation returns to more stable levels.

However, the London stock market faced a slight decline. This was attributed to the British pound's increase, following reports showing that UK retail sales had risen more than anticipated in September.

In Asia, Hong Kong and Shanghai markets surged based on optimism that the Chinese government would take steps to revitalize the economy. Technology companies and previously struggling real estate firms were among those that performed well.

Official data released on Friday revealed that China’s economy grew by an annual rate of 4.6 percent in the third quarter, which, while better than forecasts, still marked the slowest growth since the beginning of 2023.

Additional figures indicated that both retail sales and industrial output in China had increased more than expected in September. Joshua Mahoney, chief market analyst at Scope Markets, commented, "The raft of data... provided an opportunity to show that the economy was on the right path."

In Paris, shares of Kering, the parent company of Gucci, saw a more than five percent increase, driven by optimism over rising Chinese demand for luxury items.

The People’s Bank of China has initiated a fresh initiative to stimulate the markets, hinting at more rate cuts in the near future to achieve its annual growth target of five percent.

Reports from state media noted that leading banks reduced interest rates on yuan deposits for the second time this year, aiming to encourage more lending.

Harry Murphy Cruise, an economist at Moody's Analytics, commented on the recent measures: "The latest supports are very welcome... but more is required if officials are to tackle the structural problems in the economy."

Other Asian markets had encouraging performances as well. In Tokyo, the stock market closed higher, largely thanks to a weaker yen benefitting exporters. Taipei's market rose significantly, fueled by a nearly five percent spike in shares of TSMC, following its announcement of a larger-than-expected profit increase and an upward revision of growth forecasts due to strong AI technology demand.

In the commodities market, gold prices reached a new record high of $2,714.10 per ounce. Analysts attributed this surge to the ECB's interest rate policy and ongoing concerns regarding geopolitical tensions in the Middle East.

In the United States, Wall Street experienced a relatively quiet session on Thursday. The positive retail sales data led investors to reassess expectations for interest rate cuts by the Federal Reserve, resulting in a rise in the dollar initially before it fell against major currencies on Friday.

The market performance on Friday was as follows: London’s FTSE 100 was down by 0.3 percent at 8,359.63 points; Paris’ CAC 40 rose by 0.5 percent to 7,618.40; and Frankfurt's DAX gained 0.1 percent to 19,603.29 points. The Nikkei 225 in Tokyo increased by 0.2 percent to 38,981.75 points; the Hang Seng Index in Hong Kong surged by 3.6 percent to close at 20,804.11 points; and the Shanghai Composite rose by 2.9 percent, closing at 3,261.56 points.

In New York, the Dow Jones reported an increase of 0.4 percent, closing at 43,239.05 points. Regarding currency exchange rates, the euro increased to $1.0846 from $1.0830, while the British pound rose to $1.3043 from $1.3013. The dollar fell to 149.93 yen from 150.23 yen, and the euro dropped to 83.13 pence from 83.22 pence.

In the commodities market, West Texas Intermediate crude oil saw a decrease of 0.6 percent, priced at $70.23 per barrel, and Brent North Sea crude oil dropped 0.6 percent to $74.00 per barrel.

Stocks, China, Economy