Asian, European Shares Rise on Growth in China GDP
LONDON ( The Deal) -- Asian and European markets seemed to recover their mojo Wednesday morning, pushing the Ukraine crisis into the background and concentrating on the "slightly better than expected" news from both the Chinese economy and some major company results.
Positive-ish factor No. 1: China's GDP growth in the first quarter was up 7.4% from a year earlier. That was less than the government's own 7.5% target, but more than the 7.3% predicted by analysts. That left Chinese markets, including Hong Kong, up on the day, but less so than in early trading when traders' moods had been buoyed by the late rally last night in New York. Hong Kong was up just 0.11% to close at 22,696.
Japan's Nikkei 225 index swung up 3.01%. to 14,417.68. The Chinese economy was a backdrop there, but more important was the rise in the likes of telecom group Softbank, which owns about 37% of Chinese e-commerce giant Alibaba. Alibaba's net income, still reported within Yahoo!'s (YHOO - Get Report) earnings, doubled in the fourth quarter, sending Softbank up 8.5%.
Europe, too, seemed to breathe a sigh of relief at the Chinese figures, although there's increasing skepticism that Beijing will feel any pressure to introduce a major economic stimulus package on the basis of this outcome.But positive-ish factor No. 2 also came into play here. German chipmaker Infineon rose 2.42% to 8.11 euros and its rival Dialog Semiconductor was up 2.64% at 16.83 euros on the back of Tuesday's less-bad-than- feared Intel results in New York. Similarly in London, supermarket giant Tesco, the world's no.3 behind Walmart (WMT) and French grocer Carrefour, announced a full-year trading profit of 3.3 billion pounds ($5.54 billion), down 7% from last year. The company also took a $900 million impairment charge on its China business, which it has now partly sold into a local joint venture. But the market loved it. Analysts had expected worse. Tesco was up 3.4% at 296 pence a share. Consumer products group Reckitt Benckiser was up 0.41% at 4,872 pence, despite a foreign-exchange related drop in first quarter net revenue, after CEO Rakesh Kapoor said a spinoff of the company's pharmaceuticals business was emerging as "a strong option," in an ongoing strategic review. The FTSE 100 was up 0.29% at 6,560, while in Paris the CAC40 was up 0.99% at 4,388. In Frankfurt, the DAX was up 0.74% at 9,242 and Moscow's Micex Composite was down less than 0.3% at 1,307.42.