Friday, 03 April 2015 10:55

Commodity and Equity Markets Down on Weak Chinese Data

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Weak Industrial Production and GDP data of China adversely affected commodity and stock prices. According to National Bureau of Statistics GDP for the last quarter of 2013 fell to 7.7% from previous 7.8% and Industrial production dropped at 5 months low of 9.7% from 10% earlier.

WTI oil prices fell by 0.79% after the data release and trading near to $93.62 at 10:13 GMT. Fall in industrial production may reduce demand of oil at the world second largest oil consumer. Slowing growth is the matter of concern as it can further deepen the commodity prices.

Copper and Nickel fell by 0.32% and 1.0% and trading near to Rs. 457.25 and Rs. 889.60 respectively at Multi commodity Exchange of India. Falling investment in factories likely to reduce demand for metals and China is the world largest metal consumer. Nickel fell first time after a week gain on Indonesia ban on mined ores export.

Equity market also got affected by weak economic performance. Hang Seng fell by 0.8%. Other Asian indices are also negative except Sensex. European markets are negative by on an average of 0.20%. Credit crunch and high borrowing rate may further weaken Chinese market.

In this year China Economy may grow with the rate of 7.4%. If the growth rate slips below 7% then we may see China stepping slowly into the economic recession. It is better for the country to lessen the debt burden and make available funds at affordable rate with tight monitoring system and then we will see retracement in growth rate.


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