Shares edged higher in early European trading on Monday after Asian benchmarks slipped on news that China’s economy grew at a lackluster 6.7 percent pace in the last quarter. Attention was focused on the latest back-and-forth between China and the U.S. in a tariffs dispute, and on President Donald Trump’s summit with Russian President Vladimir Putin, planned for later in the day.
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KEEPING SCORE: Germany’s DAX gained 0.1 percent to 12,555.65 and the CAC 40 in France was almost flat at 5,430.60. Britain’s FTSE 100 edged 0.1 percent lower to 7,652.97. The Dow future contract added 0.2 percent to 25,055.00 while the future for the SP 500 picked up 0.1 percent to 2,806.50.
ASIA’S DAY: The Shanghai Composite index lost 0.6 percent to 2,814.04, while Hong Kong’s Hang Seng edged 0.1 percent higher to 28,539.66. The Kospi in South Korea fell 0.4 percent to 2,301.99 and Australia’s SP ASX 200 gave up 0.4 percent to 6,241.50. Shares fell in Southeast Asia and Taiwan. Japan’s market was closed for a holiday.
TRADE UPDATE: China announced it filled a World Trade Organization challenge Monday to U.S. President Donald Trump’s proposal for a tariff hike on $200 billion of Chinese goods, reacting swiftly amid deepening concern about the economic impact of their spiraling technology dispute. Earlier Monday, European Council President Donald Tusk, while on a visit to Beijing, urged President Donald Trump, Russian President Vladimir Putin and China to work with Europe to avoid trade wars and prevent conflict and chaos. He said Europe, China, the U.S. and Russia had a “common duty” not to destroy the global order but to improve it by reforming international trade rules.
CHINA ECONOMY GROWS: China’s economic growth slowed in the quarter ending in June, adding to challenges for Beijing amid a mounting tariff battle with Washington. The 6.7 percent pace of growth for the world’s second-largest economy compared with 6.8 percent in the previous quarter. Even before the trade dispute with Washington erupted, forecasters expected growth to cool after Beijing started tightening controls on bank lending last year to rein in surging debt.
ANALYST’S VIEWPOINT: “The upshot is that the statistics bureau is now starting to more publicly acknowledge that the economy is losing steam. This should make it easier for officials to justify shifting to a more supportive policy stance,” Julian Evans-Pritchard of Capital Economics said in a commentary. “The People’s Bank has already been nudging down market interest rates since the beginning of the year but is likely to take the more high-profile step of cutting benchmark lending rates in the coming months.”
CURRENCY: The dollar rose to 112.44 yen from 112.39 yen late Friday while the euro rose to $1.1701 from $1.1688.
ENERGY: Benchmark U.S. crude fell 37 cents to $70.64 per barrel in electronic trading on the New York Mercantile Exchange. It rose 1 percent on Friday to $71.01 a barrel in New York. Brent crude, used to price international oils, lost 10 cents to $74.23 per barrel.