The ruling Communist Party leaders in Beijing have begun a four-day meeting to discuss economic strategy for the next decade. Investors are eagerly awaiting any measures that may help boost the struggling property market and address the significant debts of local governments.
Despite a slight decrease in annual economic growth from 5.3% in the first quarter, the 5% growth in the first half of the year aligns with the government’s forecast for 2024. Quarterly economic expansion stood at 0.7%.
Market analysts have expressed concerns about the economic data released by China, suggesting a mixed outlook for the world’s second-largest economy. Stock markets in Hong Kong and Shanghai experienced slight declines, with the Hang Seng falling 1.1% and the Shanghai Composite slipping 0.1%.
The central bank in China opted to keep its medium-term lending rate steady at 2.5%, affecting interest rates on loans and mortgages. Meanwhile, markets in Tokyo were closed for a public holiday.
In other parts of Asia, the Kospi in Seoul lost 0.1%, while the S&P/ASX 200 in Australia gained 0.9%. Taiwan’s Taiex and the SET in Bangkok both experienced slight losses.
On Wall Street, U.S. stocks saw a rise, buoyed by expectations of lower interest rates. The S&P 500 closed at 5,615.35, marking its fifth winning week in the last six. The Dow and Nasdaq also posted gains.
The Russell 2000 index had a strong week, rallying 1.1% and closing out its best performance in eight months. Bank of New York Mellon reported better-than-expected profits, leading to a 5.2% increase in its stock price. Tech stocks like Nvidia also contributed to the market’s positive performance.
However, Wells Fargo saw a 6% decline despite reporting stronger profits, highlighting the mixed signals in the market. Inflation data in the U.S. revealed higher prices at the wholesale level, slightly disappointing economists.
Traders are anticipating a 94% likelihood of the Federal Reserve easing rates in September, which could alleviate economic pressures related to borrowing costs. U.S. benchmark crude oil and Brent crude both saw slight gains in early trading.
Currency exchange rates also saw some movement, with the U.S. dollar weakening against the Japanese yen. The euro remained relatively stable.
Overall, global markets are reacting to a mix of economic data and geopolitical factors, with investors closely monitoring developments in China and the U.S. for indications of future market trends. The dollar and South Korean won were being traded at a foreign exchange dealing room in Seoul, South Korea on Monday, July 15, 2024. Asian shares had a mixed start to the week as China announced that its economy had grown at a slower-than-expected rate of 4.7% annually in the last quarter. This news impacted the trading atmosphere in the region.