China growth lifts stocks from euro zone shad­ows

The Pak Banker - - International3 -

LONDON: Signs of ro­bust eco­nomic growth in China helped lift world stocks on Wed­nes­day while the euro halted its re­cent slide with in­vestors look­ing for the next move by pol­i­cy­mak­ers to tackle the euro zone's debt cri­sis.

Bet­ter-than-ex­pected Chi­nese fac­tory data in Novem­ber, with the of­fi­cial Chi­nese pur­chas­ing man­agers' in­dex (PMI) ris­ing to a sev­en­month high of 55.2, showed health in one of the world's largest eco­nomic en­gine, lift­ing sen­ti­ment.

Euro­pean shares rose nearly 1 per­cent and Ja­pan was half a per­cent higher. But se­ri­ous con­cerns re­mained about the pres­sure on euro zone debt and the meth­ods by which it might be eased.

On Euro­pean bond mar­kets them­selves, de­mand for Ger­man debt fell ahead of a five-year bond sale, al­though yield spreads with pe­riph­er­als such as Spain were slightly tighter. Debt-rid­den Por­tu­gal will is­sue 500 mil­lion eu­ros in 12-month T-bills and is likely to pay a new record pre­mium since the in­tro­duc­tion of the euro in a fresh sign of mar­ket pres­sure to fol­low Ire­land and Greece to seek a bailout.

Stan­dard & Poor's warn­ing on Tues­day that it could cut Por­tu­gal's credit rat­ings if growth prospects weak­ened fur­ther was hav­ing lit­tle im­pact. The agency also said it could act if pri­vate cred­i­tors be­come sub­or­di­nated to pub­lic cred­i­tors in a pos­si­ble aid pro­gram. -Reuters

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