(Alliance News) - Stocks in London are set to open lower on Monday, as the latest data from China added to fears that the country's economic recovery was faltering.
IG says futures indicate the FTSE 100 to open 34.5 points, 0.5%, at 7,400.07 on Monday. The index of London large-caps closed down 5.64 points, 0.1%, at 7,434.57 on Friday.
China's economy grew 6.3% year-on-year in the second quarter, a figure that belies the country's slowing post-pandemic recovery and one that analysts warn is inflated given the low base of comparison with lockdown-wracked 2022. Beijing's National Bureau of Statistics released the growth data, saying in a statement that the economy "showed a good momentum of recovery".
"By quarter, the GDP grew by 4.5% year-on-year in the first quarter and 6.3% in the second quarter," NBS spokesman Fu Linghui said.
While faster than the first quarter, the reading was below FXStreet-cited market consensus of 7.3%.
In quarter-on-quarter terms, Monday's data showed the world's second-largest economy only grew 0.8% in April through June, slowing from the 2.2% growth seen in the first three months of 2023.
Swissquote analyst Ipek Ozkardeskaya commented: "Market sentiment regarding the weakening growth numbers is mixed. On one hand, weak growth means that the government and the People's Bank of China will step up efforts to further ease the financial conditions and pave the way for a quicker recovery. On the other hand, supportive policies put in place so far have had little impact."
In China, the Shanghai Composite was down 1.2%, while the S&P/ASX 200 in Sydney was marginally lower.
Financial markets in Hong Kong were closed due to a typhoon, while markets in Tokyo were closed as planned for Marine Day.
Oil prices retreated slightly after the weak Chinese data, with a barrel of Brent oil trading at USD79.11 early Monday, lower than USD80.12 late Friday.
The dollar was largely stronger against major currencies in early exchanges in Europe.
Sterling was quoted at USD1.3088 early Monday, lower than USD1.3117 at the London equities close on Friday. The euro traded at USD1.1225, lower than USD1.1240. Against the yen, the dollar was quoted at JPY138.56, flat versus JPY138.55.
In the US on Friday, Wall Street ended mixed, with the Dow Jones Industrial Average up 0.3%, the S&P 500 down 0.1% and the Nasdaq Composite down 0.2%. Earnings season had kicked off on Friday with mixed results from big US banks.
On Tuesday, there will be half-year results from Bank of America, with Goldman Sachs, IBM, Netflix and Tesla reporting on Wednesday.
Gold was quoted at USD1,956.32 an ounce early Monday, edging lower than USD1,957.56 on Friday.
In Monday's UK corporate calendar, there are full-year results from construction materials distributor Brickability and investment fund Gore Street Energy Storage Fund.
It will be a quiet day in the economic calendar on Monday, but the week picks up pace with inflation data from the UK and eurozone on Wednesday.
By Elizabeth Winter, Alliance News senior markets reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2023 Alliance News Ltd. All Rights Reserved.
