Chinese GDP slows to 6.2% Y/Y
Copper reacts positively to other Chinese data
FTSE pulls back to 7500
The pace of growth in the world’s second largest economy has slowed to its lowest level in almost 30 years with Chinese GDP for the second quarter falling to +6.2% year-on-year. This is the lowest reading since 1992 and with most of the weakness coming from exports it appears that the ongoing trade tensions with the US are taking their toll. While the slow down is clearly not good news, it had been widely expected and as such came as no surprise. Traders seemingly focused more on the latest industrial production and retail sales figures which were released simultaneously with the GDP data and both beat forecasts. There was little by the way of an immediate adverse market reaction as Chinese stock benchmarks actually ended the session in the green with the CSI 300 index closing up by 0.9%.
Copper prices which can be seen as a proxy for the Chinese economy have gained in response to the data. 5740 remains a potentially key support. Source: xStation
Sports Direct delays results; shares plunge
Stocks in London are pretty much flat at the start of the week with the FTSE 100 trading around the 7500 mark. One of the biggest movers comes from the mid-caps with Sports Direct in the headlines after the retailer announced that it will be delaying the publication of its annual results. These sort of postponements are rarely due to good news and with the firm blaming the current uncertainty over the future financial performance of House of Fraser for the hold up there’s a good chance that investors are set for a negative shock. Shares have tumbled in response, with the stock down more than 10% on the day.
UK stocks have pulled back to the 7500 level after respecting the 78.6% fib region around 7612. The 61.8% fib is at 7382. Source: xStation