LONDON: Global stock markets experienced a notable decline on Tuesday, prompted by disappointing economic data from China that heightened concerns about the health of the world’s second-largest economy. The bearish sentiment affected markets across Wall Street, where upbeat US retail sales for July were overshadowed by apprehensions surrounding the Chinese economic figures.
European markets also saw red as most bourses closed with losses. While Tokyo’s market managed to close higher, Hong Kong’s Hang Seng Index dropped by 1.0 percent, and Shanghai’s Composite Index slipped by 0.1 percent.
The release of Chinese data on Tuesday revealed a deceleration in growth for July retail sales, along with industrial production falling short of analyst expectations. Additionally, an uptick in unemployment added to the concerns. These developments have intensified worries about China’s heavily indebted property sector and the future of prominent developer Country Garden, which issued warnings of significant losses.
China’s central bank implemented a key interest rate cut in an attempt to stimulate growth, indicating that the country’s post-Covid recovery is encountering obstacles. However, experts remain skeptical about the long-term efficacy of this move, especially without concurrent government spending measures.
The drop in copper and oil prices further underlined concerns about China’s economic health, with private sector demand appearing weak. The situation has prompted some analysts to conclude that “China is struggling.”
Oil prices experienced a decline, driven by apprehensions over weakened demand from China, the world’s largest importer of crude oil.
On the currency front, the ruble traded at around 98 to the dollar after Russia raised its key interest rate to 12 percent following an emergency central bank meeting. The ruble’s sharp decline, triggered by Russia’s invasion of Ukraine and Western sanctions, had led to the currency falling below 100 to the dollar.
The dollar, on the other hand, maintained its strength against the Japanese yen, reaching its highest level since November.
Global Stock Markets Situation
By late trading on Tuesday, major market indices stood as follows:
New York – Dow: DOWN 0.7 percent at 35,069.61 points
London – FTSE 100: DOWN 1.6 percent at 7,389.64 (close)
Frankfurt – DAX: DOWN 0.9 percent at 15,767.28 (close)
Paris – CAC 40: DOWN 1.1 percent at 7,267.70 (close)
EURO STOXX 50: DOWN 1.0 percent at 4,288.57 (close)
Hong Kong – Hang Seng Index: DOWN 1.0 percent at 18,581.11 (close)
Shanghai – Composite: DOWN 0.1 percent at 3,176.18 (close)
Tokyo – Nikkei 225: UP 0.6 percent at 32,238.89 (close)
In currency markets:
Euro/dollar: UP at $1.0929 from $1.0908 on Monday
Pound/dollar: UP at $1.2730 from $1.2686
Euro/pound: DOWN at 85.82 pence from 85.97 pence
Dollar/yen: DOWN at 145.42 yen from 145.50 yen
Oil prices also declined:
West Texas Intermediate: DOWN 1.9 percent at $80.97 per barrel
Brent North Sea crude: DOWN 1.6 percent at $84.84 per barrel
