Chinese markets bounced at the end of the week, despite weaker-than-expected GDP growth, but this week’s minor recovery has not reversed all the losses during the early October volatility. The Shanghai Composite Index is back above 2,500 points after today’s 2.5% gain, but this still below the 2,800 points level seen at the start of October and 1,000 points lower than in early 2018.
The 6.5% GDP growth was below forecasts and the lowest rate since the first quarter of 2009 when the world was grappling with the financial crisis.
Once again, Chinese national and regional regulators are taking up an interventionist stance that has cheered investors after a bruising month and year.
China’s gains were also in defiance of a weaker trend on Thursday from the United States. Hong Kong’s Hang Seng rose modestly on the day but Japan’s Nikkei dropped slightly from the day before.
Ahead of the UK Government Budget at the end of the month, Chancellor Philip Hammond was boosted by news that public borrowing was around £1.5 billion lower than the month before. The Chancellor as scotched the idea of Budget “giveaways” despite the improving public finances.
The FTSE 100 is still in the doldrums and remains just above 7,000 points after recent weakness. The pound is still within touching distance of breaking back below $1.30, which usually offers support to the dollar earners of the index.
Bank of England Governor Mark Carney is making a speech in New York in the late afternoon UK time.
InterContinental Hotels (IHG) was the biggest loser after a third-quarter trading statement to the market.
Italy’s FTSE MIB was off 1% as the 10-year yield rose, and the spread with German bonds hit a five-and-a-half year high.
After Netflix’s (NFLX) well received earnings report, the big guns of the tech sector start releasing earnings next week, including Amazon (AMZN) and Google parent company Alphabet (GOOGL). Facebook (FB) and Apple (AAPL) follow the week beginning 29 October.
Canadian inflation numbers are due today. In September, the rise in the cost of living as measured by CPI is expected to be 2.7%, compared with 2.8% in August. Canadian retail sales are also due on the same day.
Economics gets more interesting next week, with the release of US GDP data from the third quarter and Canada’s central bank expected to raise interest rates to 1.75%.
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