Stocks Struggle On China Data; Gas Prices Extend Losses

Global stock markets struggled Tuesday on news of China's slowing economy, but European gas prices hit another 16-month low on fading fears of a winter supply crunch

London, (UrduPoint / Pakistan Point News - 17th Jan, 2023 ):Global stock markets struggled Tuesday on news of China's slowing economy, but European gas prices hit another 16-month low on fading fears of a winter supply crunch.

Asia's equities mostly fell as data showed the Chinese economy grew at its slowest pace in four decades last year, sparking talk of an uneven recovery as the nation emerges from debilitating zero-Covid measures.

European markets lacked direction with Frankfurt and Paris inching almost imperceptibly into the green whereas London was off 0.1 percent as shares in online supermarket Ocado plummeted more than nine percent to 731.80 pence on declining sales.

US stocks opened lower in a busy day for US earnings, with quarterly profits slumping at banking giant Goldman Sachs.

The Dow Jones index was off half of one percent minutes after the opening bell on Wall Street while the tech-heavy Nasdaq was off 0.1 percent.

Goldman Sachs shares dived almost four percent after the investment bank reported a 69 percent plunge in net earnings to 1.2 billion.

Goldman's profit drop comes on the heels of a trove of mixed results last week from other financial giants, with some large banks pointing to a "mild recession" as a likely scenario.

Europe's gas market meanwhile returned to a low not seen since September 2021, as unusually warm weather dampened winter demand expectations, but oil prices advanced.

Chinese GDP weighed heavily on sentiment after it slowed sharply to three percent in 2022, the worst year since 1976 excluding pandemic-hit 2020, as lockdowns and other containment policies hammered activity, data showed Tuesday.

That beat the 2.7 percent forecast and the fourth-quarter reading also topped estimates, but the outlook remains unclear.

- Uneven recovery? - "The decision to drop the zero-Covid policy in the face of rising opposition, while welcome, is likely to prompt an uneven recovery for the Chinese economy in the coming months," said CMC Markets UK analyst Michael Hewson.

"This is because of the unwelcome side effects of the inevitable explosion in infection rates and mortality in a largely unvaccinated population, which we've already seen in the aftermath of this relaxation last month." Other analysts remain hopeful, however, that China's reopening will fuel its strong rebound and help support the global economy, which is buckling in the face of interest rate hikes and soaring inflation.

"Looking forward, we expect to see a sustained economic recovery in 2023 as a result of reopening and policy stimulus," said Chaoping Zhu, of JP Morgan Asset Management.

Traders are now awaiting a key policy decision by the Bank of Japan on Wednesday, which comes after it last month surprised markets by announcing a shift away from its ultra-loose monetary policy, sending the yen soaring.

There will also be a focus on speeches by top finance officials at this week's annual Davos summit in Switzerland.

- Key figures around 1430 GMT - London - FTSE 100: DOWN 0.1 percent at 7,853.29 points Frankfurt - DAX: UP 0.1 percent at 15,153.25 Paris - CAC 40: UP 0.2 percent at 7,059.64 EURO STOXX 50: UP 0.1 percent at 4,160.92 New York - Dow: DOWN 0.5 percent at 34,145.22 Tokyo - Nikkei 225: UP 1.2 percent at 26,138.68 (close) Hong Kong - Hang Seng Index: DOWN 0.8 percent at 21,577.64 (close) Shanghai - Composite: DOWN 0.1 percent at 3,224.24 (close) Euro/dollar: UP at $1.0865 from $1.0824 on Monday Dollar/yen: DOWN at 128.50 yen from 128.55 yen Pound/dollar: UP at $1.2285 from $1.2204 Euro/pound: DOWN at 88.46 pence from 88.66 penceBrent North Sea crude: UP 2.3 percent at $86.40 a barrelWest Texas Intermediate: UP 1.6 percent at $81.10 a barrel