World markets mixed as China trade data offset by BP oil spill woes

The Associated Press ~ staff The News
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BANGKOK, Thailand — World stock markets were mixed Thursday, with strong Chinese trade figures boosting confidence among some investors while others steered away from riskier assets amid fears that petroleum giant BP could end up in bankruptcy over the Gulf of Mexico oil spill.

Oil extended gains above $74 a barrel, with prices jumping on a fall in U.S. crude inventories and after Federal Reserve Chairman Ben Bernanke said the U.S. economic recovery remains on track. The dollar weakened against the yen, and the euro enjoyed a slight rebound against the greenback.

Wall Street was set to rally after a sell-off on Wednesday, with Dow futures up by 33 points or 0.3 per cent, and the broader Standard and Poors 500 futures up 6.2, or 0.6 per cent, to 1,061.80.

Shares were headed lower in early European trading, with the FTSE 100 index of leading British shares down 0.3 per cent, Germany’s DAX off 0.4 per cent and France’s CAC-40 lower by 0.4 per cent.

Better-than-expected trade data out of China helped buoy markets in Asia. Imports and exports both surged by nearly 50 per cent in May over a year earlier in a positive sign for growth in the world’s third-largest economy.

“Chinese export data seemed quite encouraging, at least on the surface,” said Ben Kwong Man Bun, chief operating officer at KGI Asia Ltd. in Hong Kong. “The market is not as fearful as before.”

Japan’s benchmark Nikkei 225 stock average added 103.52 points, or 1.1 per cent, to 9,542.65. The Nikkei held firm as the government said Japan’s economy — the world’s second-largest — grew a revised 5.0 per cent in the January-March quarter, up from an earlier estimate of 4.9 per cent growth.

South Korea’s Kospi index closed up 4.48, or 0.3 per cent, to 1,651.70 while Australia’s S&P/ASX 200 was up 1.1 per cent at 4,435.3. Hong Kong’s Hang Seng rose 0.1 per cent to 19,632.70. Benchmarks in Singapore, Taiwan and New Zealand also ended the day up.

However, the Shanghai Composite Index retreated 0.8 per cent to 2,562.58, with some investors anticipating negative news when China releases its inflation data Friday, said Castor Pang, director of research at Cinda International in Hong Kong. Figures are expected to show a 3 per cent increase in the consumer price index, and traders are worried that Beijing may respond by clamping down further on credit.

“China’s stock market is not performing very well even though export data is excellent,” Pang said. “Investors are still cautious.”

In New York on Wednesday, the Dow Jones industrial average fell 40.73 points, or 0.4 per cent, to 9,899.25. While the Dow gained more than 125 points at midday, it slumped later as investors sold energy stocks on fears that the U.S. oil spill disaster could force BP to seek bankruptcy protection. Analysts also said the company might have trouble paying its dividend.

BP sought to reassure investors on Thursday with a statement released before the London Stock Exchange opened for trading that said the company has “significant capacity and flexibility” to deal with the cost of responding to the Gulf of Mexico oil spill.

In currencies, the U.S. dollar declined to 90.97 yen in Tokyo from 91.26 yen in New York late Wednesday. The euro rose to $1.2027 from $1.1980.

Benchmark crude for July delivery was down 30 cents to $74.07 a barrel in electronic trading on the New York Mercantile Exchange. The contract $2.39 to settle at $74.38 on Wednesday.

Organizations: BP, Standard and Poors 500, FTSE 100 KGI Asia Nikkei SP/ASX 200 Shanghai Cinda International Dow Jones industrial average London Stock Exchange New York Mercantile Exchange

Geographic location: China, U.S., Gulf of Mexico Hong Kong BANGKOK Thailand Japan Germany France Asia New York South Korea Australia Singapore Taiwan New Zealand Beijing Tokyo

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