Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
Stock markets in Europe began Friday on a positive note even as China continues to weather lingering headwinds from Covid controls.
Stock markets in Europe rode higher early Friday morning after China reported GDP growth that fell short of expectations for the second quarter. For instance, the Stoxx 600 index climbed 0.7% as most sectors and stock exchanges were in positive territory. At the forefront of Europe’s gains were utility stocks operating more than 1.5% higher. Conversely, travel and leisure stocks were trading 0.6% lower.
Embattled German gas giant Uniper had shares in the green, trading at the top of the European benchmark. Uniper’s stock experienced an upswing of more than 9.6% following key comments from its majority owner Fortum. The Finish state-owned energy company reportedly stated that it felt compelled to do everything within its power to protect European energy markets. In fact, Uniper was the first German energy company to point out surging energy prices due to reduced Russian gas supplies. To stay afloat, the company has been in talks with the German government over a possible bailout in recent weeks. Last week, Uniper officially submitted a bailout application to Berlin.
Trading at the bottom of the pan-European Stoxx 600 was Swedish medtech company AddLife, following its Q2 results. The company’s shares took a sizable hit and traded 10% lower.
Overall, the upswing in European stocks comes amid increased fears stemming from looming recession due to additional interest rate hikes. Conversely, US stock markets did not perform as well as expected.
Europe Stock Markets Up, China Economic Growth Trajectory Down
As European stock markets picked up the pace to begin Friday, China’s markets traded down on weak GDP figures. The East Asian heavyweight managed GDP growth of just 0.4% in the second quarter of this year compared to 2021. This missed the expectation mark set by Reuters analysts as the country continues to deal with the aftermath of Covid controls.
Chinese industrial production for June also fell short of expectations. Although this rose 3.9% year-over-year, it still did not meet the 4.1% forecast for 2022. Nonetheless, June’s retail sales experienced a shot in the arm from spending across numerous categories. These included autos, cosmetics, and medicine, to name a few. However, spending was pared down in other industries such as autos, as well as cosmetics and medicine.
Overall fixed asset investment in China gained on a monthly basis, rising 0.95% for the period ended June 30th to an undisclosed figure. In addition, investment in infrastructure and manufacturing remained largely unchanged on positive optics from May to June. Conversely, the real estate situation in China deteriorated, as an investment in the sector in the first half of the year slumped 5.4% YoY. This is even worse than the 4% decline between January and May this year.
There were mixed outcomes in China’s unemployment results for the second quarter. Although unemployment declined from pre-pandemic highs to 5.8% in June, the country’s ages 16-24 category saw an increase to 19.3%.
Commenting on China’s overall Q2 GDP result, Bruce Pang, chief economist and head of research, Greater China, JLL, noted:
“China’s economy is no doubt bottoming. But it is still in the midst of its recovery.”
Read other market news on our website.