Stock markets hit record highs as Chinese GDP beats forecasts – business live

All the day’s economic and financial news, including reaction to China’s latest growth figures

European stock markets have opened higher, thanks to China’s growth figures.

Overnight there was a quartet of important Chinese figures, led by a better than expected 6.9% GDP reading.

That was joined by a far stronger than forecast industrial production number, an 11% increase in retail sales year-on-year and solid fixed asset investment figure.

China takes in a lot of raw materials, to drive its factories and underpin its infrastructure spending.

Craig James, chief economist at Commonwealth Securities in Sydney, says China’s latest growth figures may indicate that the world economy is holding up.

He says (via Reuters):

“(The new data) is encouraging for global growth as well because China is the second largest economy on the planet.”

“Based on this data, there is no need for easing and no need really for tightening either because inflationary pressures are very much contained. So I think the People’s Bank of China just continues to be watchful.”

As China goes, so go emerging markets. Its solid growth reinforces recoveries for commodity exporters and keeps 2017’s pick-up in global growth on track,”

China Q2 GDP was firmer than expected (6.9%y/y, cons 6.8%, prior 6.9%), driven by a sizeable pick-up in industrial production. Sentiment was dampened by the Stats Bureau’s acknowledgement that H1 economic growth was “hard won”.

Our Asia strategist calls that an understatement to be sure; GDP growth was clearly buffered by significant credit expansion to ensure headline growth remained at or above target. Most recognise the dangerous imbalances/can-kicking involved in China’s growth strategy.

The news that China’s GDP beat expectations drove shares up across Asia, although ironically Chinese investors didn’t share the enthusiasm.

The Hong Kong Hang Seng rose by 0.3%, while Korea’s Kospi and India’s Sensex gained almost 0.4%.

Hurray, new week, new record! MSCI All World has just hit fresh ALL-TIME high as econ momentum in China boosted optimism for global growth. pic.twitter.com/CDGMGESa0K

This after six years of slowing, suggesting successful management of stimulus.

“It’s reverse psychology,” said Hao Hong, managing director and head of research at BOCOM International. “If everything is fine, you don’t have to inject liquidity. But if they’re injecting liquidity, something must be wrong.”

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

China has got the new week off to a good start, by releasing growth figures that beat City expectations.

Overall, the economy continued to show steady progress in the first half…but international instability and uncertainties are still relatively large, and the domestic long-term buildup of structural imbalances remain.

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Read the original at Economics | The Guardian.