World shares subdued despite strong growth data from China
Stock markets got off to a slow start for the week despite news that the Chinese economy grew 2.3% in 2020 after a sharp contraction early in the year.
Shares fell in London and Tokyo on Monday but advanced in Hong Kong, Paris and Shanghai. Most U.S. markets are closed for a national holiday.
Investors appear to have grown increasingly wary over the deepening economic devastation from the pandemic despite hopes that COVID-19 vaccines and fresh aid for the U.S. economy might hasten a global recovery.
In Britain, the FTSE 100 dropped 0.2% to close the day at 6,720.65. Germany’s DAX edged 0.4% higher to 13,848.35 and the CAC 40 in Paris rose 0.1% to 5,617.27.
China was the first country to suffer outbreaks of the new coronavirus and the first major economy to begin recovering as meanwhile the U.S., Europe and Japan are struggling with outbreaks.
The National Bureau of Statistics said growth in the three months ending in December rose to 6.5% over a year earlier, up from the previous quarter’s 4.9%. The economy contracted at a 6.8% pace in the first quarter of 2020 as the country fought the pandemic with shutdowns and other restrictions.
Some measures showed a slowing of activity in December, but “The big picture is still that activity remains strong, which is helping to support the labor market,” Stephen Innes of Axi said in a commentary.
The Hang Seng in Hong Kong gained 1% to 28,862.77, while the Shanghai Composite index climbed 0.8% to 3,596.22.
But gloom prevailed in other major regional markets. Tokyo’s Nikkei 225 dropped 1% to 28,242.21 and the Kospi in South Korea lost 2.3% to 3,013.93. Australia’s S&P/ASX 200 declined 0.8% to 6,663.00. Shares fell in Southeast Asia and Taiwan.
On Friday, the S&P 500 fell 0.7% to 3,768.25, with stocks of companies that most need a healthier economy taking some of the sharpest losses. It lost 1.5% for the week. The Dow Jones Industrial Average lost 0.6% to 30,814.26, and the Nasdaq composite dropped 0.9% to 12,998.50.
Treasury yields have been climbing on expectations the U.S. government will borrow much more to pay for the additional stimulus proposed by President-elect Joe Biden, in addition to improved economic growth and higher inflation. The yield on the 10-year Treasury zoomed above 1% last week for the first time since last spring and briefly topped 1.18% this week.
In other trading, benchmark U.S crude oil lost 12 cents to $52.24 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, shed 20 cents to $54.90 per barrel.
The dollar was trading at 103.67 Japanese yen, down from 103.88 yen on Friday. The euro slipped to $1.2076 from $1.2078.
AP Business Writer Joe McDonald in Beijing contributed.