Breaking News

China data met with relief by stock markets, Brexit Plan B in focus

Stock MarketsJan 21, 2019 04:37AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. An investor watches a board showing stock information at a brokerage office in Beijing

By Dhara Ranasinghe

LONDON (Reuters) - World stock markets kept their nerve on Monday, as data showed the Chinese economy slowed last year, underlining the need for more stimulus from Beijing.

European stock markets opened broadly lower (STOXX) as a note of caution set in with British Prime Minister Theresa May set to present her 'Plan B' for Brexit to parliament later in the day. Trade in general was subdued with U.S. markets closed for the Martin Luther King Jr. Day.

World markets appeared to experience some relief thanks to data showing that the Chinese economy, the world's second biggest, grew 6.4 percent in the fourth quarter from a year earlier, matching levels last seen in early 2009 during the global financial crisis.

But the data was in line with forecasts and there were some bright spots, with factory output picking up stronger-than-expected in December and a stronger services sector.

"On balance, the data is relatively positive and does not point to a hard landing," said Timothy Graf, head of macro strategy at State Street (NYSE:STT) Global Advisors in London.

"The consumption data being better than expected is the positive takeaway in that China is trying to engineer a move towards a consumer-led economy."

Growing signs of weakness in China -- which has generated nearly a third of global growth in recent years -- has fueled anxiety about risks to the world economy in recent weeks and are weighing on profits for firms such as Apple (O:AAPL).

MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) rose 0.2 percent, touching its highest since early December. Stock markets in China (CSI300) and Japan (N225) added 0.25-0.6 percent.

MSCI's emerging market stock index (MSCIEF) briefly touched its highest level since October, while the Australian dollar , often used a liquid proxy for China investments, nudged up to $0.7185.

Chinese stocks had rallied on Friday on reports U.S. Treasury Secretary Steven Mnuchin discussed lifting some or all tariffs imposed on Chinese imports, a story later denied.

U.S. President Donald Trump said on Saturday there has been progress toward a trade deal with China, but denied that he was considering lifting tariffs.


In currency markets, the British pound pulled further away from last week's two-month highs against the euro as investors awaited the next steps to break the deadlock over Brexit.

British Prime Minister Theresa May's Brexit deal was rejected by lawmakers last week and May will return to parliament on Monday to outline her so-called Plan B.

"May's latest statement on her Brexit intentions is likely to suggest that her Plan B is simply to carry on with her Plan A," said Chris Scicluna, head of economic research at Daiwa Capital Markets. He said discussions would be held in the hope of avoiding "the major economic self-harm of a no deal."

The uncertainty kept sterling pressured at $1.2852 , having briefly been as high as $1.3000 last week.

Against the euro, the pound slipped a quarter of a percent to 88.46 pence (EURGBP=D3).

Weakness in sterling helped lift London's blue-chip stock index (FTSE), while stock markets in Paris and Frankfurt weakened 0.2-0.4 percent (GDAXI) (FCHI).

The dollar softened against the yen at 109.58 , and was about a fifth of a percent weaker versus the euro (EUR=). Against a basket of major currencies, the dollar was a shade softer at 96.229. (DXY).

Elsewhere, crude prices briefly rose to their highest so far in 2019 after data showed refinery processing in China, the world's second-largest oil consumer, climbed to a record last year despite a slowing economy. [O/R]

Brent crude oil futures (LCOc1) briefly rose above $63 for the first time in 2019. U.S. West Texas Intermediate crude futures (CLc1) were steady at $53.78 a barrel, having earlier pushed above $54 a barrel for the first time this year.

For Reuters Live Markets blog on European and UK stock markets, please click on: [LIVE/]

China data met with relief by stock markets, Brexit Plan B in focus

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Ross Gordon
Ross Gordon Jan 21, 2019 8:32AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Brexit plan B will not stop the EU from collapsing.
1 0
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email