Global equities split after China reported slower growth

Global equities were mixed on Monday after China reported its economy grew 8.1% year-on-year in 2021, although growth slowed to half that level in the latest quarter.

Paris, Frankfurt, Tokyo and Shanghai advanced, while Hong Kong and Seoul declined.

The weakness of China's economy towards the end of 2021 is pushing suggestions for Beijing to intervene to support growth by cutting interest rates or injecting money into the economy through public works spending.

Shortly before the growth data was published, China's central bank announced a cut in the medium-term lending rate for commercial banks to its lowest level since 2020.

Economic momentum remains weak amid repeated outbreaks and problems in the real estate sector," Julian Evans-Pritchard of Capital Economics said in a commentary. He expects China's policymakers to remain relatively tight on lending and control credit growth.

As a result, policy easing is likely to soften the economic slowdown rather than lead to a recovery," he said.

A slowdown in activity in China, the region's biggest economy, could slow growth across the region. Blockades and other precautions imposed to combat coronavirus outbreaks could also exacerbate shortages of key parts and components, exacerbating difficulties in delivery and supply chains.

The Shanghai Composite index added 0.6 per cent to 3,541.67 points, while Hong Kong's Hang Seng fell 0.7 per cent to 2,418.43 points.

South Korea's Kospi was down 1.1 percent to 2,890.10 after North Korea launched two suspected ballistic missiles into the sea early Monday in its fourth weapons launch this month, South Korea's military said, with the apparent aim of demonstrating its military strength amid a pause in diplomacy with the United States and the United States.

Germany's DAX added 0.2% to 15,910.54 points and the Parisian CAC 40 also rose 0.2% to 7,156.53 points. Britain's FTSE 100 jumped 0.7% to 7,592.79 points. The S&P 500 Index future rose 0.2 per cent and the Dow Jones Industrial Average rose 0.1 per cent.

In Asian trading, Tokyo's Nikkei 225 rose 0.7% to 28,333.52 as the government reported a rise in machinery orders in November as private investment and manufacturing activity improved during a lull in coronavirus outbreaks. Shipbuilders' orders rose 170%.

Australia's S&P/ASX 200 rose 0.3% to 7417.30 points.

The S&P 500 rose 0.1% on Friday to close at 4662.85. The Nasdaq technology index rose 0.6 per cent to 14,893.75 points. The Dow Jones Industrial Average fell 0.6% to 35,911.81 points.

Shares of smaller companies also recovered from an early fall. The Russell 2000 index rose 0.1% to 2162.46 points.

Rising shares in technology companies as well as gains in energy and other sectors helped outweigh declines in banks and other market sectors on a day when investors were mostly focused on a combination of corporate earnings reports and discouraging retail sales data.

The mixed finish ended a week of choppy trading on Wall Street, which exacerbated January's market slump. The benchmark S&P 500 index, which is up 26.9% at 2021, is now around 2.8% below its all-time high of 3 January.

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The 10-year Treasury bond yield remained stable at 1.79%.

The price of US crude oil rose 30 cents to $84.12 a barrel in electronic trading on the New York Mercantile Exchange. It rose 2.1 per cent on Friday, boosting energy stocks.

Brent crude added 6 cents to $86.12 a barrel.

The US dollar rose to 114.32 Japanese yen from 114.18 yen. The euro rose to $1.1430 from $1.1417.

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