Global Stocks Steady as Data Adds to Doubts About China

Workers waiting for a cargo ship in Qingdao port, eastern China last week. Data Monday showed that China’s economy grew 6.9% in the third quarter, slightly better than the 6.8% forecast by economists polled by The Wall Street Journal. ENLARGE
Workers waiting for a cargo ship in Qingdao port, eastern China last week. Data Monday showed that China’s economy grew 6.9% in the third quarter, slightly better than the 6.8% forecast by economists polled by The Wall Street Journal. Photo: Agence France-Presse/Getty Images

Global stocks held steady Monday, despite the release of fresh evidence clouding expectations that China will be able to reach its 7% growth target for the year.

The Stoxx Europe was up 0.4% after data showed that China’s economy grew 6.9% in the third quarter.

While the growth rate of the world’s second largest economy has fallen to its weakest level since 2009, the indicator was slightly better than expected. Economists polled by The Wall Street Journal had forecast China’s third-quarter growth at 6.8%.

“Relief is the key word for markets today,” said Darren Ruane, head of fixed interest rates strategy at Investec Wealth & Investment, which oversees about $ 43 billion in assets. A weaker print of China’s growth data would have likely caused a selloff, he said.

China shares initially gained after the release, but the Shanghai Composite Index closed 0.1% lower, tracking other Asian shares lower.

Hong Kong’s Hang Seng HSNGY -0.62 % Index was down 0.3%, while Japan’s Nikkei fell 0.9%.

The risk of a slowdown in Chinese growth is the single most important issue driving investment decisions at the moment, according to Jens Nordvig, a strategist at Nomura. “From a medium-term perspective it is hard to be fundamentally optimistic,” he said. Nomura is projecting a 5.8% growth rate for the country in 2016.

Monday’s moves follow a week of gains for Wall Street, driven by better-than-expected third-quarter results and by expectations that the U.S. Federal Reserve will wait to raise interest rates from current ultralow levels, after lackluster U.S. economic data. Ultralow interest rates in developed economies have buoyed stock markets in recent years as investors have sought higher yielding returns.

In corporate news, shares in German lender Deutsche Bank DB 0.99 % gained 3.6% after the announcement of a broad management shake-up following the appointment of John Cryan as chief executive officer.

Looking to the week ahead, investors will expecting to hear from European Central Bank President Mario Draghi for more clues on the extension of the stimulus program at the central bank’s meeting Thursday. Barclays BCS 0.78 % expects more monetary easing to be announced by the end of the year. “It is just a matter of time until the ECB decides to drive the euro lower,” its analysts said in a note.

In currencies, the euro was mostly unchanged against the dollar around $ 1.1358. The yen was mostly flat against the dollar, with the dollar trading around ¥119.40.

In commodities, gold was down 0.9% at $ 1,173.00 a troy ounce while Brent crude oil was 1% lower at $ 49.94 a barrel.

Write to Chiara Albanese at [email protected]


WSJ.com: Markets

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