World stocks climb after record China growth
Stock markets rose around the world on Friday as strong economic data out of China fueled optimism over the global economic recovery.
London’s benchmark FTSE 100 index climbed above 7,000 points for the first time since February 2020, or just before the coronavirus pandemic took hold worldwide, AFP wrote.
“This represents a massive milestone in recovering from the terrible pandemic and shows how investors’ confidence has completely changed since just over a year ago,” noted Russ Mould, investment director at AJ Bell.
“The market was understandably shocked as the coronavirus gripped the world but... it has quickly focused on the future and the ability for corporate earnings to recover.”
Shares in miners and oil producers were scooped up Friday on news that China’s economy – the world’s second biggest after the US – expanded at a record pace in the first quarter.
China saw expansion of 18.3 percent in the first quarter, boosted by a sharper-than-expected increase in retail sales.
The economic growth figure was the highest since records began three decades ago, enhanced by its chronically weak comparison figure from last year, though the reading was slightly below forecasts in an AFP survey.
It followed figures on Thursday showing US jobless claims came in at their lowest level since the pandemic began, while retail sales soared in March.
“Impressive retail sales and jobless claims figures highlight the positive impact (US President) Joe Biden’s $1.9 trillion coronavirus support package has made upon jobs and consumer spending,” said Joshua Mahony, senior market analyst at IG trading group.
Wall Street’s Dow index ended Thursday above 34,000 points for the first time and the S&P 500 clocked yet another record high.
And on Friday both the Dow and S&P pushed higher at the open, while the Nasdaq Composite dipped.
“The bulls continue to call the shots and they have reason once again to like what they see and hear as it resembles in many respects what they saw and heard yesterday,” said Patrick J. O’hare at briefing.com.
He pointed to continuing good earnings news, including from bank Morgan Stanley, as well as a surge in new housing starts.
Traders have been buoyed also by falling US Treasury bond yields which soothed worries that strong economic recovery could send inflation rocketing and force the Federal Reserve to raise its record-low borrowing costs.
Oanda analyst Edward Moya said the US economy would likely see more healthy readings over the coming months as Biden’s stimulus along with his planned $2.25-trillion infrastructure plan and pent-up consumer demand will send it into “overdrive”.