Chinese Stocks Slide After Economic Growth Cools
October 18 2019 - 08:39AM
Dow Jones News
By Max Bernhard
Chinese stocks dropped sharply Friday after the economy slowed
further in the third quarter, adding to mounting concerns about
global growth.
The benchmark Shanghai Composite Index fell 1.3%, its biggest
decline in a month. Fresh data showed that China's economy grew 6%
in the quarter as business activity continued to deteriorate in the
world's No. 2 economy. Each quarterly slowdown in growth has pulled
the economic performance to new lows not seen since the current
measure of output was adopted in 1992.
"The figures are painting markets in red today," said Ipek
Ozkardeskaya, a senior analyst at London Capital Group. "Pulling
below 6% would be really bad for investor sentiment, not only in
China, but globally."
The Stoxx Europe 600 gauge and futures tied to the Dow Jones
Industrial Average were largely unchanged as investors weighed
evidence of the further slowdown in China's economy and the
uncertainty surrounding Brexit, as well as disappointing corporate
results across Europe.
In the U.S., American Express rose 1.6% in premarket trading
after its third-quarter earnings beat forecasts. Shares in
Coca-Cola jumped 1.4% following higher sales posted by the beverage
giant. Intuitive Surgical jumped 2.8% in after-hours trading after
the company beat Wall Street forecasts for sales and profit.
Later in the day, investors might get clues on potential U.S.
central-bank activity when Federal Reserve officials, including
Robert Kaplan and Richard Clarida, make speeches.
In the U.K., the FTSE 250 equity index ticked 0.2% higher and
the pound wavered between gains and losses against the U.S. dollar.
Investors are watching developments closely before U.K. lawmakers
vote Saturday on a draft Brexit agreement struck with the European
Union. Prime Minister Boris Johnson is trying to muster enough
support for the deal in the U.K. Parliament.
British lawmakers' support for the deal would provide a
short-term boost to the pound and European equities, but wouldn't
eliminate deeper concerns, said Seema Shah, senior investment
strategist at Principal Global Investors. "You may have lifted the
uncertainty, but you still have to deal with Brexit," she said.
French auto maker Renault was the biggest loser in Europe,
declining 11.6% after cutting its full-year revenue and
operating-margin guidance on a sales slump outside Europe and
higher costs from developing lower-emissions car models. French
food giant Danone dropped 7.8% after it lowered expectations for
its like-for-like sales growth in 2019.
Write to Max Bernhard at Max.Bernhard@dowjones.com
(END) Dow Jones Newswires
October 18, 2019 08:24 ET (12:24 GMT)
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