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- Global stocks plummeted on Thursday when China released mixed data showing some growth, but its retail sales failed to climb into positive territory.
- China’s Shanghai Benchmark Composite Index fell 4.5%, while Hong Kong’s Hang Seng Index fell 2.1%.
- European markets fell before a European Central Bank meeting where leaders are expected to keep firing on any further stimulus measures.
- US markets reversed the losses from the previous day and fell between 0.7% and 1.2%.
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Global stocks fell on Thursday after the latest economic data from China showed a return to growth by posting better-than-expected metrics aside from its retail sales.
China’s mainland benchmark index, the Shanghai Composite fell 4.5% and the Hong Kong Hang Seng fell 2.1%.
Gross domestic product for the world’s second-largest economy rose 3.2% in the three months ending June, above estimates, but its retail sales fell short of forecasts, falling 1.8% in June. .
China’s “surprise” jump in GDP was well above market expectations of 2.5% growth, said Jeffrey Halley, senior market analyst at OANDA.
But “the number of headlines is flattered to deceive,” he said, noting that “the Chinese domestic consumer appears to be more reluctant than expected to go out and consume.”
China’s exports fell 3% compared to the previous year, in a sign that its trade situation may be one of its “crucial challenges”.
“The question is, is China increasing the production of export-related goods that end up stored on the docks awaiting a new home abroad?” Halley said.
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The decline in China’s stocks continued in Europe, with the pan-European Stoxx 50 falling 0.5% ahead of a European Central Bank meeting in which leaders are likely to await any further monetary stimulus.
Investors are expected to watch for the European Union summit on Friday for signs that a recovery fund that boosts southern Europe’s debt may be approved soon, Reuters said.
S&P 500-linked futures partially reversed the gains of the previous day, falling 0.6% despite hopes of a coronavirus vaccine by Moderna and strong gains delivered by Goldman Sachs.
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Here is the overview of the market as of 10am London (5am ET):
- Asian indices fell with China’s Shanghai Composite 4.5%, Hong Kong’s Hang Seng 2.1% and Japan’s Nikkei 0.7%.
- European stocks fell, with Germany’s DAX 0.6%, Britain’s FTSE 100 0.3% and Euro Stoxx 50 0.5%.
- US stocks will open lower. Futures underlying the Dow Jones Industrial Average, S&P 500 and Nasdaq fell between 0.7% and 1.2%.
- Oil prices fell, with West Texas Intermediate falling 1.4% to $ 40.64 and Brent crude falling 1% to $ 43.44.
- Benchmark 10-year Treasury yield fell to 0.61%.
- Gold fell 0.4% to $ 1,806 per ounce.
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