Global shares mostly down amid Chinese economic mayhem

Beijing Global stock markets declined Tuesday ahead of an update on US retail spending after China reported that an economic slump deepened in July and its central bank cut a key interest rate to shore up growth.

London, Shanghai and Wall Street futures declined. Tokyo advanced. Oil prices fell. Chinese consumer and factory activity slowed more than expected in July, official data showed. The People’s Bank of China cut its interest rate on one-week loans to banks. “Policymakers are starting to hit the panic button,” Stephen Innes of SPI Asset Management said in a report. Also Tuesday, Russia’s central bank raised its main lending rate by 3.5 percentage points to 12 per cent in an emergency move to strengthen the ruble after the currency reached its lowest value since early in the war with Ukraine. The ruble has lost one-third of its value since the start of this year. In early trading, the FTSE 100 in London fell 1.2 per cent to 7,417.72. The CAC 40 in Paris declined 1 per cent to 7,277.68 and the DAX in Frankfurt lost 0.8 per cent to 15,781.86. On Wall Street, futures for the benchmark S&P 500 index and for the Dow Jones Industrial Average were down 0.5 per cent.

On Monday, the S&P 500 gained 0.6 per cent ahead of a US government on retail spending that traders hope will help to avert a possible recession. The Dow edged up 0.1 per cent. The Nasdaq composite gained 1.1 per cent. Economists expect Tuesday’s report on monthly retail sales to show growth accelerated to 0.4 per cent in July from 0.2 per cent in June. In Asia, the Shanghai Composite Index fell slightly less than 0.1 per cent to 3,176.17 after official data showed growth in Chinese retail spending slowed to 2.5 per cent over a year earlier from June’s already weak 3.1 per cent. Growth in factory output and investment also decelerated. The People’s Bank of China cut its interest rate on one-week loans to banks to 1.8 per cent from 1.9 per cent in a sign of growing official urgency about reversing the downturn. The Hang Seng in Hong Kong lost 0.8 per cent to 18,622.55. The Nikkei 225 in Tokyo gained 0.6 per cent to 32,238.89 after the Japanese economy grew by an unexpectedly strong 1.5 per cent over the previous quarter in the three months ending in June. Markets in South Korea and India were closed for holidays. New Zealand and Southeast Asian markets declined. Chinese leaders are trying to shore up flagging economic growth without resorting to a large-scale stimulus, possibly for fear of pushing up debt they think is dangerously high. Growth slid to 0.8 per cent over the previous quarter in the three months ending in June from the January-March period’s 2.2 per cent.