Chinese Business

Asian stocks extended a global rally Thursday and the dollar sank after Federal Reserve boss Jerome Powell flagged a rate hike slowdown and China signalled a softer approach to fighting Covid.

A growing sense of hope that months of sharp monetary tightening around the world is finally reining inflation back from its decades-long highs sent equities surging in November, even as policymakers warned more work had to be done.

And in a much-anticipated speech Wednesday, Powell said the full effects of the Fed’s belt-tightening had yet to be felt but that it “makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down”.

He signalled the US central bank’s December gathering would likely see officials lift borrowing costs by 50 basis points, having pushed them up by a bumper 75 points at the past four meetings.

However, Powell did say policy would need to remain tight “for some time” to restore price stability, echoing comments from other Fed officials who suggested there might not be any cuts until 2024.

Analysts said the reaction to Powell’s remarks — which had been expected to be his most dovish in some time — highlighted a sense of relief among investors that a long-hoped-for pivot was on the cards.

All three main indexes on Wall Street surged, with the Nasdaq leading the way as rate-sensitive tech firms rocketed.

The gains extended November’s rally and helped claw back more of the hefty losses suffered for much of 2022.

Investors were “putting those nasty thoughts of a bear market to bed as the December Santa Rally springs alive”, said Stephen Innes at SPI Asset Management.

“Indeed investors are revelling in the afterglow of moderating Fed signals. And with the Fed done with jumbo hikes, it’s seemingly enough to mark the bottom in the bear market and could lead to a sustainable rally.”

He added that bets on rates topping five percent were fading and the advance in markets could push into the new year, with another slowdown in November inflation potentially fuelling a bull rally — when a market rises 20 percent from its recent low. 

“Still,” he warned, “inflation will need to play along.”

– China Covid hope –

In another sign of hope, data earlier showed that eurozone inflation eased for the first time in 17 months in November.

Hong Kong extended its rally into a third day, with tech giants including Alibaba and Tencent tracking massive gains in their US-listed stock, while Shanghai was also up.

Those rallies were also helped by signs that China is edging towards a more pragmatic approach to fighting the coronavirus, having hammered the economy this year with its strict zero-Covid strategy of lockdowns and mass testing.

After widespread unrest against the measures — and calls for more political freedoms — authorities have announced moves aimed at loosening some restrictions.

On Wednesday, Vice Premier Sun Chunlan, who heads China’s Covid campaign, told the National Health Commission that the fight was entering a new phase as Omicron weakens and more people are vaccinated.

Bloomberg News also noted that she did not refer to “dynamic Covid-zero”, the term used to explain Beijing’s strategy. 

“While we shouldn’t expect a dramatic shift in policy from the leadership, particularly before the March Congress, any modest softening in its Covid-zero policy will and should be welcomed,” said OANDA’s Craig Erlam. 

“The approach has been extremely damaging to growth and confidence and the protests highlight how public opinion towards it is changing.”

Among other markets, Tokyo, Sydney and Taipei added more than one percent while Singapore, Seoul, Wellington, Mumbai and Bangkok were also in positive territory.

London, Paris and Frankfurt rose at the open.

The dollar suffered another sell-off, tanking more than one percent to briefly hit as low as 135.84 yen Thursday, a level not seen since August.

The greenback’s losses come after it soared across the board this year as Fed monetary policy diverged more and more from other central banks.

– Key figures around 0820 GMT –

Tokyo – Nikkei 225: UP 0.9 percent at 28,226.08 (close)

Hong Kong – Hang Seng Index: UP 0.8 percent at 18,736.44 (close)

Shanghai – Composite: UP 0.5 percent at 3,165.47 (close)

London – FTSE 100: Up 0.3 percent at 7,598.35

Dollar/yen: DOWN at 136.28 yen from 138.03 yen on Wednesday

Euro/dollar: UP at $1.0424 from $1.0408 on Wednesday

Pound/dollar: UP at $1.2100 from $1.2052

Euro/pound: DOWN at 86.20 pence from 86.34 pence

West Texas Intermediate: DOWN 0.6 percent at $80.05 per barrel

Brent North Sea crude: DOWN 0.6 percent at $86.46 per barrel

New York – Dow: UP 2.2 percent at 34,589.77 (close)

Sri Lanka said Thursday it was reorganising its blackout-prone electricity grid to guarantee power to tourist resorts, in an effort to lure back foreign travellers after a bruising economic crisis.

Months of food, petrol and pharmaceutical shortages brought widespread misery to the island nation this year, along with power cuts that reached 13 hours a day at their worst.

The unprecedented financial shock sparked months of angry protests, culminating in July when a crowd stormed the compound of then-president Gotabaya Rajapaksa and forced him to flee the country.

But the crisis has since eased and the government that took charge after his departure is eager to jumpstart the tourism industry, a crucial source of revenue.

“We will have a good winter season,” tourism minister Harin Fernando told reporters in Colombo. “The situation has improved and it is safe for holiday-makers.”

The energy ministry announced that designated tourist areas would be exempt from national blackouts still in force for 2.5 hours each night.

Those areas include Sri Lanka’s lush southern coastal beaches and the hill region around Ella, home to nature reserves famed for their elephant herds.

Sri Lanka has been unable to meet its energy demand after struggling to pay for imported fuel for power plants.

But the ministry said recent rains had filled dam reservoirs for hydroelectricity and eased pressure on the grid.

Sri Lanka’s worst economic crisis since independence from Britain in 1948 began when the country ran out of foreign exchange to pay for vital imports.

The Covid pandemic dealt a hammer blow to tourism and foreign remittances from Sri Lankans working abroad, both crucial sources of income.

Rajapaksa’s government was also blamed for worsening the crisis through excessive spending and mismanagement.

Sri Lanka defaulted on its $46 billion foreign debt in April. 

His successor has hiked taxes and tried to bring prices under control, with inflation easing to 61 percent in November from an eye-watering 69.8 percent peak two months earlier.

Sri Lanka is now in talks with international creditors to restructure its borrowings and secure an International Monetary Fund bailout.

The tourism industry has bounced back strongly despite the downturn and political unrest.

Nearly 570,000 foreign travellers visited Sri Lanka in the first 10 months of the year, up from 200,000 the year before.

Asian stocks extended a global rally Thursday and the dollar sank after Federal Reserve boss Jerome Powell flagged a rate hike slowdown and China signalled a softer approach to fighting Covid.

A growing sense of hope that months of sharp monetary tightening around the world is finally reining inflation back from its decades-long highs sent equities surging in November, even as policymakers warned more work had to be done.

And in a much-anticipated speech Wednesday, Powell said the full effects of the Fed’s belt-tightening had yet to be felt but that it “makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down”.

He signalled the US central bank’s December gathering would likely see officials lift borrowing costs by 50 basis points, having pushed them up by a bumper 75 points at the past four meetings.

However, Powell did say policy would need to remain tight “for some time” to restore price stability, echoing comments from other Fed officials who suggested there might not be any cuts until 2024.

Analysts said the reaction to Powell’s remarks — which had been expected to be his most dovish in some time — highlighted a sense of relief among investors that a long-hoped-for pivot was on the cards.

All three main indexes on Wall Street surged, with the Nasdaq leading the way as rate-sensitive tech firms rocketed.

The gains extended November’s rally and helped claw back more of the hefty losses suffered for much of 2022.

The dollar also suffered a sell-off, tanking more than one percent against the yen to levels not seen since August.

The greenback’s losses come after it soared across the board this year as Fed monetary policy diverged more and more from other central banks.

– Softer Covid approach in China? –

Investors were “putting those nasty thoughts of a bear market to bed as the December Santa Rally springs alive”, said Stephen Innes at SPI Asset Management.

“Indeed investors are revelling in the afterglow of moderating Fed signals. And with the Fed done with jumbo hikes, it’s seemingly enough to mark the bottom in the bear market and could lead to a sustainable rally.”

He added that bets on rates topping five percent were fading and the advance in markets could push into the new year, with another slowdown in November inflation potentially fuelling a bull rally — when a market rises 20 percent from its recent low. 

“Still,” he warned, “inflation will need to play along.”

In another sign of hope, data earlier showed that eurozone inflation eased for the first time in 17 months in November.

Hong Kong led the gains in Asia again, with tech giants including Alibaba and Tencent tracking massive gains in their US-listed stock, while Shanghai was also well up.

Those rallies were also helped by signs that China is edging towards a more pragmatic approach to fighting the coronavirus, having hammered the economy this year with its strict zero-Covid strategy of lockdowns and mass testing.

After widespread unrest against the measures — and calls for more political freedoms — authorities have announced moves aimed at loosening some restrictions.

On Wednesday, Vice Premier Sun Chunlan, who heads China’s Covid campaign, told the National Health Commission that the fight was entering a new phase as Omicron weakens and more people are vaccinated.

Bloomberg News also noted that she did not refer to “dynamic Covid-zero”, the term used to explain Beijing’s strategy. 

“It is clear that the authorities are setting the stage for Covid measures to be relaxed,” said Justin Tang, at United First Partners. “Equity prices will see a boost as China joins the rest of the world in living with Covid.”

Among other markets, Tokyo, Sydney and Taipei added more than one percent while Singapore, Seoul, Wellington, Mumbai and Bangkok were also in positive territory.

– Key figures around 0530 GMT –

Tokyo – Nikkei 225: UP 1.1 percent at 28,266.50 

Hong Kong – Hang Seng Index: UP 1.4 percent at 18,851.25

Shanghai – Composite: UP 0.7 percent at 3,173.59

Dollar/yen: DOWN at 136.29 yen from 138.03 yen on Wednesday

Euro/dollar: UP at $1.0445 from $1.0408 on Wednesday

Pound/dollar: UP at $1.2101 from $1.2052

Euro/pound: DOWN at 86.32 pence from 86.34 pence

West Texas Intermediate: DOWN 0.1 percent at $80.45 per barrel

Brent North Sea crude: DOWN 0.2 percent at $86.82 per barrel

New York – Dow: UP 2.2 percent at 34,589.77 (close)

London – FTSE 100: UP 0.8 percent at 7,573.05 (close)

Asian stocks extended a global rally Thursday and the dollar fell after Federal Reserve boss Jerome Powell flagged a slowdown in the pace of interest rate hikes and China opened the way for a softer approach to fighting Covid.

A growing sense of hope that months of sharp monetary tightening around the world is finally reining inflation back from its decades-long highs sent equities surging in November, even as policymakers warned more work had to be done.

And in a much-anticipated speech Wednesday, Powell said that the full effects of the Fed’s belt-tightening had yet to be felt but that it “makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down”.

He signalled the December gathering would likely see officials lift borrowing costs 50 basis points, having pushed them up by a bumper 75 points at the past four meetings.

However, he did say policy would need to remain tight “for some time” to restore price stability, echoing comments from other Fed officials who have suggested there might not be any cuts until 2024.

Analysts said the reaction to Powell’s remarks — which had been expected to be his most dovish in some time — highlighted a sense of relief among investors that a long-hoped-for pivot was in the cards.

All three main indexes on Wall Street surged, with the Nasdaq leading the way as rate-sensitive tech firms rocketed.

The gains extended November’s rally and helped claw back more of the hefty losses suffered for much of 2022.

The dollar was also suffering a sell-off, having soared across the board this year as Fed monetary policy diverged more and more from other central banks.

Investors were “putting those nasty thoughts of a bear market to bed as the December Santa Rally springs alive”, said Stephen Innes at SPI Asset Management.

“Indeed investors are revelling in the afterglow of moderating Fed signals. And with the Fed done with jumbo hikes, it’s seemingly  enough to mark the bottom in the bear market and could lead to a sustainable rally.”

He added that bets on rates topping five percent were fading and the advance in markets could push into the new year, with another slowdown in November inflation potentially fuelling a bull rally — when a market rises 20 percent from its recent low. 

“Still,” he warned. “Inflation will need to play along.”

In another sign of hope, data earlier showed that eurozone inflation eased for the first time in 17 months in November.

Hong Kong led the gains in Asia again, with tech giants including Alibaba and Tencent tracking massive gains in their US-listed stock, while Shanghai was also well up.

Those rallies were also helped by signs that China is edging towards a more pragmatic approach to fighting the coronavirus, having hammered the economy this year with its strict Covid-zero strategy of lockdowns and mass testing.

After widespread unrest against the measures — and calls for more political freedoms — authorities have announced moves aimed at loosening some restrictions.

On Wednesday, Vice Premier Sun Chunlan, who is heading China’s Covid campaign, told the National Health Commission that the fight was entering a new phase as Omicron weakens and more people are vaccinated.

Bloomberg News also noted that she did not refer to “dynamic Covid-zero”, the term used to explain Beijing’s strategy. 

“It is clear that the authorities are setting the stage for Covid measures to be relaxed,” Justin Tang, at United First Partners, said. “Equity prices will see a boost as China joins the rest of the world in living with Covid.”

– Key figures around 0300 GMT –

Tokyo – Nikkei 225: UP 1.1 percent at 28,281.04 (break)

Hong Kong – Hang Seng Index: UP 1.5 percent at 18,875.14

Shanghai – Composite: UP 0.9 percent at 3,180.22

Euro/dollar: UP at $1.0426 from $1.0408 on Wednesday

Dollar/yen: DOWN at 136.75 yen from 138.03 yen

Pound/dollar: UP at $1.2081 from $1.2052

Euro/pound: DOWN at 86.32 pence from 86.34 pence

West Texas Intermediate: FLAT at $80.55 per barrel

Brent North Sea crude: DOWN 0.1 percent at $86.89 per barrel

New York – Dow: UP 2.2 percent at 34,589.77 (close)

London – FTSE 100: UP 0.8 percent at 7,573.05 (close)

The hackers leaking stolen Australian health records to the dark web on Thursday appeared to end their extortion attempt by dumping a final batch of data online and declaring:”Case closed.”

In November the hackers demanded health insurer Medibank pay US$9.7 million to keep the records off the internet — or one dollar for each of the company’s impacted customers, which included Prime Minister Anthony Albanese.

Medibank refused to pay at the urging of the federal government, which at the height of the crisis considered making it illegal for hacked companies to hand over ransoms.

On Thursday morning the hackers said they had posted the last of the data online, deliberately coinciding with International Computer Security Day.

“Happy Cyber Security Day,” they wrote. 

“Added folder full. Case closed.” 

The first batches of stolen data started appearing on a dark web forum on November 9, in curated posts highlighting medical records about drug addiction, pregnancy terminations and sexually transmitted infections. 

Medibank on Thursday said the latest post was “incomplete and hard to understand” — an indication the hackers may have lost interest after a ransom was taken off the table.  

“While our investigation continues there are currently no signs that financial or banking data has been taken,” Medibank said in a statement.  

Australian Federal Police Commissioner Reece Kershaw said in November the hackers were believed to be a group of “loosely affiliated cyber criminals” who were based in Russia. 

Cybersecurity analysts have suggested they could be linked to Russian hacker group REvil. 

Australian government ministers have variously dubbed the hackers “scumbags”, “scummy criminals”, and “rolled gold mongrels”.

Wall Street stocks soared and the dollar fell Wednesday after Federal Reserve Chair Jerome Powell signaled a shift from the central bank’s aggressive policy to counter inflation.

Major US indices, which had been near flat prior to Powell’s appearance, suddenly vaulted higher. 

The gains came after European bourses also advanced on better inflation data in the eurozone.

“This was the unofficial pivot the markets have been waiting for,” Forex.com’s Joe Perry said of Powell’s comments. “As a result of Powell’s dovishness, the US dollar index sold off aggressively.”

Powell, appearing at the Brookings Institution in Washington, said the Fed could ease its stance on interest rate hikes “as soon as” December when policymakers are next scheduled to meet.

He added that the full effects of the bank’s rapid tightening are yet to be felt.

“Thus, it makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down,” he said.

But Powell warned that policy will likely still have to remain tight “for some time” to restore price stability.

The Fed has raised the benchmark lending rate by 0.75 percentage point four consecutive times in recent months, out of six times this year, in an aggressive effort to rein in prices.

Major US indices rallied after the remarks, with the Nasdaq leading the way with a 4.4 percent surge.

The dollar also retreated as markets bet on fewer big rate hikes.

Earlier, Paris and Frankfurt both advanced after eurozone inflation eased to 10 percent in November, the first drop in 17 months, according to official data.

Analysts had expected the inflation rate in the single currency area to fall but the drop was steeper than predicted by Bloomberg and FactSet, who foresaw 10.4 percent. 

But the November figure may not convince the European Central Bank that it can stop raising interest rates, as its president Christine Lagarde has expressed scepticism that inflation has peaked.

As late as Monday, Lagarde warned: “I think that there is too much uncertainty … to assume that inflation has actually reached its peak. It would surprise me.”

The inflation figure was still “extraordinarily high” but offered “hope that inflation may have peaked and the deceleration could be faster than anticipated”, said Craig Erlam, senior market analyst at OANDA.

– ‘Intensifying headwinds’ –

In Asia, stocks mostly rebounded as investors looked past weekend demonstrations in China after officials announced moves aimed at softening the zero-Covid strategy.

But in a sign that the leadership was determined to maintain its authority, the country’s top security body called for a “crackdown” against “hostile forces”.

New clashes broke out in China’s southern city of Guangzhou on Tuesday night and into Wednesday, according to witnesses and social media footage verified by AFP.

Data showing China’s factory activity shrank further in November underscored the impact the zero-Covid approach has had on the world’s second-biggest economy.

“The headwinds facing China are intensifying and the protests of recent days could make it even more challenging to navigate… Even the best-case scenario is one of significant turbulence,” added Erlam.

– Key figures around 2140 GMT –

New York – Dow: UP 2.2 percent at 34,589.77 (close)

New York – S&P 500: UP 3.1 percent at 4,080.11 (close)

New York – Nasdaq: UP 4.4 percent at 11,468.00 (close)

London – FTSE 100: UP 0.8 percent at 7,573.05 (close)

Frankfurt – DAX: UP 0.3 percent at 14,397.04 (close)

Paris – CAC 40: UP 1.0 percent at 6,738.55 (close)

EURO STOXX 50: UP 0.8 percent at 3,964.72 (close)

Tokyo – Nikkei 225: DOWN 0.2 percent at 27,968.99 (close)

Hong Kong – Hang Seng Index: UP 2.2 percent at 18,597.23 (close)

Shanghai – Composite: UP 0.1 percent at 3,151.34 (close)

Euro/dollar: UP at $1.0408 from $1.0330 on Tuesday

Dollar/yen: DOWN at 138.03 yen from 138.63 yen

Pound/dollar: UP at $1.2052 from $1.1952

Euro/pound: DOWN at 86.34 pence from 86.42 pence

Brent North Sea crude: UP 2.9 percent at $85.43 per barrel

West Texas Intermediate: UP 3.0 percent at $80.55 per barrel

Stock markets fluctuated on Wednesday as eurozone inflation slowed for the first time in 17 months and investors awaited fresh signals about the US central bank’s interest rate plans.

Markets were also buoyed by hopes that China will further ease its strict Covid containment measures following widespread protests, though gains were tempered by leaders’ warnings of a crackdown on dissent.

Traders were awaiting a key speech by Federal Reserve chief Jerome Powell, with many expecting him to outline plans for future interest rate hikes to tackle high US consumer prices.

“Will he adopt a more hawkish-minded tone like he did after the last FOMC (Fed policy) meeting or will he have a less hawkish tone?” said Briefing.com analyst Patrick O’Hare.

“His tone is going to move the market’s thinking with respect to the path of monetary policy,” he said.

Powell was due to speak after government data on Wednesday showed that the US economy grew more than initially reported in the third quarter, reflecting upward revisions to retail spending and some forms of investment.

London, Paris and Frankfurt closed in the green, but the Down Jones lost around 0.4 percent.

Eurozone inflation eased to 10 percent in November, the first drop in 17 months, according to official data.

But this may not lead to an easing of European Central Bank policy as ECB president Christine Lagarde has expressed scepticism that inflation has peaked.

Inflation in the bloc had hit a record 10.6 percent in October, boosted also by soaring energy and food bills in the wake of Russia’s war in Ukraine.

“Euro area inflation figures surprised on the downside, providing an early indication that the record price pressures seen in recent months may have peaked,” said CEBR economist Karl Thompson.

However, he warned that “inflation is nonetheless likely to remain elevated throughout 2023” and forecast rising rates next month.

The inflation figure was still “extraordinarily high” but offered “hope that inflation may have peaked and the deceleration could be faster than anticipated”, said Craig Erlam, senior market analyst at OANDA.

Global central banks, including the Fed, have ramped up borrowing costs this year in a bid to dampen red-hot inflation that was fuelled also as economies reopened from the pandemic.

– ‘Intensifying headwinds’ –

In Asia, stocks mostly rebounded as investors looked past weekend demonstrations in China after officials announced moves aimed at softening the zero-Covid strategy.

But in a sign that the leadership was determined to maintain its authority, the country’s top security body called for a “crackdown” against “hostile forces”.

New clashes broke out in China’s southern city of Guangzhou on Tuesday night and into Wednesday, according to witnesses and social media footage verified by AFP.

Data showing China’s factory activity shrank further in November underscored the impact the zero-Covid approach has had on the world’s second-biggest economy.

“The headwinds facing China are intensifying and the protests of recent days could make it even more challenging to navigate… Even the best-case scenario is one of significant turbulence,” added Erlam.

Elsewhere, oil prices jumped by around three percent, with the international benchmark, Brent, reaching almost $87 per barrel.

– Key figures around 1630 GMT –

New York – Dow: DOWN 0.4 percent at 33,717.64 points

London – FTSE 100: UP 1.0 percent at 7,587.51 (close)

Frankfurt – DAX: UP 0.3 percent at 14,397.04 (close)

Paris – CAC 40: UP 1.0 percent at 6,738.55 (close)

EURO STOXX 50: UP 0.8 percent at 3,964.72

Tokyo – Nikkei 225: DOWN 0.2 percent at 27,968.99 (close)

Hong Kong – Hang Seng Index: UP 2.2 percent at 18,597.23 (close)

Shanghai – Composite: UP 0.1 percent at 3,151.34 (close)

Euro/dollar: DOWN at $1.0318 from $1.0330 on Tuesday

Dollar/yen: UP at 139.36 yen from 138.63 yen

Pound/dollar: DOWN at $1.1937 from $1.1952

Euro/pound: UP at 86.43 pence from 86.42 pence

Brent North Sea crude: UP 3.1 percent at $86.82 per barrel

West Texas Intermediate: UP 3.0 percent at $80.51 per barrel

Stock markets fluctuated on Wednesday as eurozone inflation slowed for the first time in 17 months and investors awaited fresh signals about the US central bank’s interest rate plans.

Markets were also buoyed by hopes that China will further ease its strict Covid containment measures following widespread protests, though gains were tempered by leaders’ warnings of a crackdown on dissent.

Traders were awaiting a key speech by Federal Reserve chief Jerome Powell, with many expecting him to outline plans for future interest rate hikes to tackle high US consumer prices.

“Will he adopt a more hawkish-minded tone like he did after the last FOMC (Fed policy) meeting or will he have a less hawkish tone?” said Briefing.com analyst Patrick O’Hare.

“His tone is going to move the market’s thinking with respect to the path of monetary policy,” he said.

Powell was due to speak after government data on Wednesday showed that the US economy grew more than initially reported in the third quarter, reflecting upward revisions to retail spending and some forms of investment.

The London, Paris and Frankfurt stock markets were up in afternoon trading while Wall Street seesawed after the opening, with the Dow falling almost 0.3 percent.

The euro, meanwhile, rose against the dollar as eurozone inflation eased to 10 percent in November, the first drop in 17 months, according to official data.

But this may not lead to an easing of European Central Bank policy as ECB president Christine Lagarde has expressed scepticism that inflation has peaked.

“The ECB is still increasing (interest) rates and this is what traders are focused on,” AvaTrade analyst Naeem Aslam told AFP.

Inflation in the bloc had hit a record 10.6 percent in October, boosted also by soaring energy and food bills in the wake of Russia’s war in Ukraine.

“Euro area inflation figures surprised on the downside, providing an early indication that the record price pressures seen in recent months may have peaked,” added CEBR economist Karl Thompson.

However, he warned that “inflation is nonetheless likely to remain elevated throughout 2023” and forecast rising rates next month.

Global central banks, including the Fed, have ramped up borrowing costs this year in a bid to dampen red-hot inflation that was fuelled also as economies reopened from the pandemic.

– China protests –

In Asia, Asian stocks mostly rebounded as investors looked past weekend demonstrations in China after officials announced moves aimed at softening the zero-Covid strategy.

But in a sign that the leadership was determined to maintain its authority, the country’s top security body called for a “crackdown” against “hostile forces”.

New clashes broke out in China’s southern city of Guangzhou on Tuesday night and into Wednesday, according to witnesses and social media footage verified by AFP.

Data showing China’s factory activity shrank further in November underscored the impact the zero-Covid approach has had on the world’s second-biggest economy.

Elsewhere, oil prices jumped by more than three percent, with the international benchmark, Brent, reaching almost $87 per barrel.

– Key figures around 1435 GMT –

New York – Dow: DOWN 0.3 percent at 33,768.55 points

London – FTSE 100: UP 1.0 percent at 7,585.80 

Frankfurt – DAX: UP 0.2 percent at 14,386.13

Paris – CAC 40: UP 0.7 percent at 6,718.06

EURO STOXX 50: UP 0.7 percent at 3,960.49

Tokyo – Nikkei 225: DOWN 0.2 percent at 27,968.99 (close)

Hong Kong – Hang Seng Index: UP 2.2 percent at 18,597.23 (close)

Shanghai – Composite: UP 0.1 percent at 3,151.34 (close)

Euro/dollar: UP at $1.0384 from $1.0330 on Tuesday

Dollar/yen: UP at 139.31 yen from 138.63 yen

Pound/dollar: UP at $1.2012 from $1.1952

Euro/pound: UP at 86.44 pence from 86.42 pence

Brent North Sea crude: UP 3.1 percent at $86.82 per barrel

West Texas Intermediate: UP 3.4 percent at $80.89 per barrel

burs-lth/imm

India’s growth slowed to 6.3 percent in the September quarter, official figures showed Wednesday, with rising rates and higher consumer prices both dragging on Asia’s third-largest economy.

This year India bounced back strongly from the coronavirus pandemic but it is now grappling with the same headwinds buffeting the global economy.

The pace of expansion fell dramatically from 13.5 percent year-on-year GDP growth in the previous quarter, a figure more illustrative of the shock to activity during the height of last year’s coronavirus wave. 

India imports more than 80 percent of its crude oil needs and rising petrol costs since Russia’s February invasion of Ukraine have hit the wallets of the country’s 1.4 billion people.

Consumer inflation has consistently overshot the central bank’s two-to-six percent target range this year, hitting an eight-year high of 7.79 percent in April.

Official data showed consumer inflation moderating slightly to 6.77 percent in October after reaching a five-month high of 7.41 percent in September.

The Reserve Bank of India (RBI) in September raised interest rates for the fourth time in five months — up a total 190 basis points this year — with a further rate hike expected next week.

Merchandise exports hit a 20-month low of $29.78 billion in October, as high inflation and recession fears hit demand in key overseas markets.

‘Resilient progress’ –

Elevated crude oil prices and a falling rupee have left India struggling with a deteriorating trade balance as import costs rise.

The Indian rupee has hit record lows this year, plunging up to 10 percent against the US dollar as the greenback rallied on risk-averse market sentiment.

But India’s currency has proven more resilient than its Asian peers, aided by regular central bank intervention.

Analysts also say pent-up consumer demand and expectations of higher government expenditure will support growth in the face of headwinds.

“Several indicators suggest that the Indian economy is making resilient progress,” State Bank of India Chief Economic Adviser Soumya Kanti Ghosh said in a note.

“Growth impulses continue to be strong and it may be better to look through the GDP headline numbers for a couple of quarters before arriving at a definitive conclusion about the growth trajectory.”

The International Monetary Fund forecasts 6.1 percent growth for India next year, down from 6.8 percent in 2022 but still significantly higher than every other major economy.

India’s benchmark Sensex index closed 0.67 percent higher in Mumbai ahead of the GDP data release.

European equities and the euro rose Wednesday as eurozone inflation slowed but remained elevated on high energy costs.

Markets were also buoyed by hopes that China will further ease its strict Covid containment measures following widespread protests, though gains were tempered by leaders’ warnings of a crackdown on dissent.

Traders were awaiting a key speech by Federal Reserve chief Jerome Powell, with many expecting him to outline plans for future interest rate hikes to tackle high US consumer prices.

Eurozone inflation eased to 10 percent in November, the first drop in 17 months but holding in double figures, the EU statistics agency said.

– Focus on rising rates –

European Central Bank president Christine Lagarde has expressed scepticism that inflation has peaked.

“The ECB is still increasing (interest) rates and this is what traders are focused on,” AvaTrade analyst Naeem Aslam told AFP, in reference to market reaction following the data.

Inflation in the bloc had hit a record 10.6 percent in October, boosted also by soaring energy and food bills in the wake of Russia’s war in Ukraine.

“Euro area inflation figures surprised on the downside, providing an early indication that the record price pressures seen in recent months may have peaked,” added CEBR economist Karl Thompson.

However, he warned that “inflation is nonetheless likely to remain elevated throughout 2023” and forecast rising rates next month.

Global central banks, including the Fed, have ramped up borrowing costs this year in a bid to dampen red-hot inflation that was fuelled also as economies reopened from the pandemic.

Meanwhile on Wednesday, Asian stocks mostly rebounded as investors looked past weekend demonstrations in China after officials announced moves aimed at softening the zero-Covid strategy.

But in a sign that the leadership was determined to maintain its authority, the country’s top security body called for a “crackdown” against “hostile forces”.

Data showing China’s factory activity shrank further in November underscored the impact the zero-Covid approach has had on the world’s second-biggest economy. 

– Key figures around 1145 GMT –

London – FTSE 100: UP 0.7 percent at 7,563.21 points

Frankfurt – DAX: UP 0.4 percent at 14,411.52

Paris – CAC 40: UP 0.6 percent at 6,710.48

EURO STOXX 50: UP 0.6 percent at 3,958.81

Tokyo – Nikkei 225: DOWN 0.2 percent at 27,968.99 (close)

Hong Kong – Hang Seng Index: UP 2.2 percent at 18,597.23 (close)

Shanghai – Composite: UP 0.1 percent at 3,151.34 (close)

New York – Dow: FLAT at 33,852.53 (close)

Euro/dollar: UP at $1.0366 from $1.0330 on Tuesday

Dollar/yen: UP at 138.76 yen from 138.63 yen

Pound/dollar: UP at $1.2013 from $1.1952

Euro/pound: DOWN at 86.28 pence from 86.42 pence

Brent North Sea crude: UP 2.5 percent at $85.14 per barrel

West Texas Intermediate: UP 2.3 percent at $80.01 per barrel