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    Stocks struggle on China data; gas prices extend losses

    January 18, 2023 - AFP World News


      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.

      In Europe, Frankfurt and Paris inched up half of one percent as natural gas prices returned to a low not seen since September 2021 thanks to unusually warm weather dampening winter demand expectations.

      Meanwhile, London lost 0.1 percent as shares in online supermarket Ocado plummeted more than nine percent to 731.80 pence on a lower than revenue rise of 0.3 percent.

      There was further bad new for Britain as Britishvolt, a UK firm behind a planned multibillion-pound gigafactory for electric vehicle batteries, collapsed Tuesday after falling into financial distress.

      The start-up was initially championed by former prime minister Boris Johnson to help drive a greener economy, but fell into administration.

      On a busy day for US earnings, investment banking giant Goldman Sachs reported 69 percent drop in quarterly profits to $1.2 billion, sending its shares diving almost four percent.

      Wall Street's blue-chip Dow Jones index was down 1.0 percent in late morning trading while the tech-heavy Nasdaq was off 0.1 percent.

      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.

      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.

      "Crude oil prices have resumed their upward track on renewed hopes that Chinese demand will see a strong rebound as the economy continues its reopening process," said Michael Hewson, chief market analyst at CMC Markets (UK) Europe.

      - Uneven recovery? -

      But Hewson also warned that Beijing's decision to drop its zero-Covid policy in the face of rising opposition "is likely to prompt an uneven recovery for the Chinese economy in the coming months."

      Other analysts remain hopeful that China's reopening will fuel its strong rebound and help support a global economy buckling in the face of interest rate hikes and soaring inflation.

      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 1630 GMT -

      New York - Dow: DOWN 1.0 percent at 33,965.05 points

      London - FTSE 100: DOWN 0.1 percent at 7,851.03 (close)

      Frankfurt - DAX: UP 0.4 percent at 15,187.07 (close)

      Paris - CAC 40: UP 0.5 percent at 7,077.16 (close)

      EURO STOXX 50: UP 0.2 percent at 4,166.03

      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: DOWN at $1.0795 from $1.0824 on Monday

      Dollar/yen: DOWN at 128.12 yen from 128.55 yen

      Pound/dollar: UP at $1.2285 from $1.2204

      Euro/pound: DOWN at 88.03 pence from 88.66 pence

      Brent North Sea crude: UP 1.4 percent at $85.65 a barrel

      West Texas Intermediate: UP 0.3 percent at $80.09 a barrel







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