Stocks mixed as China inflation increases uncertainty
TOKYO — Stocks were mostly higher Tuesday as economic data raised questions of how China might curb speculative market bubbles as inflation rises.
KEEPING SCORE: In Europe, Germany’s DAX was up 0.1 percent to 11,579 while the CAC40 of France was flat at 4,889. Britain’s FTSE 100 gained 0.4 percent to 7,266. Wall Street looked set to open without much direction, with S&P 500 and Dow futures both largely flat.
CHINA ECONOMY: China’s economy is estimated to have grown 6.7 percent in 2016, officials said, within the target range of 6.5 percent to 7 percent. Beijing will continue to cut excess capacity in steelmaking and other industries, the officials from the main planning agency told reporters. Fresh data showed China’s factory price index hit a five-year high in December at 5.5 percent over a year before. Consumer prices rose 2.1 percent in December and 2 percent in 2016.
ANALYST VIEW POINT: Higher prices could delay China’s efforts to curb excess industrial capacity, while the central bank is still focused on curbing speculative pressures and mounting debt, David Qu and Raymond Yeung of ANZ said in a commentary. “Given slowing growth and uncertainties in the economy, such as exports and fixed asset investment, we do not think the central bank will start to tighten in the first half of 2017,” they said. “However, high inflation rates will push market interest rates higher.”
ASIA’S DAY: Japan’s Nikkei 225 index dropped 0.8 percent to 19,301.44 and the Kospi in South Korea slipped 0.2 percent to 2,045.12. Hong Kong’s Hang Seng added 0.8 percent to 22,744.85. The Shanghai Composite index shed 0.3 percent to 3,161.67 and Australia’s S&P ASX 200 fell 0.8 percent to 5,760.70 after weaker-than-expected retail sales data. India’s Sensex rose 0.6 percent to 26,887.06.
ENERGY: U.S. benchmark crude oil steadied, gaining 16 cents to $52.12 a barrel in electronic trading on the New York Stock Exchange. It fell $2.03 on Monday. Brent crude, which is used to price oil sold internationally, gained 12 cents to $55.07.
CURRENCIES: The pound fell to $1.2144 from $1.2274 amid signs the British government may opt for a full break away from the European Union’s single market. The dollar fell to 115.90 yen from 116.01 yen in late trading Monday. The euro rose to $1.0580 from $1.0532. TVJ
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