World stocks lower as weak China data, slide in oil price add to growth doubts

SEOUL, South Korea – Renewed signs of weakness in China’s economy and the slide in oil prices sent world stock markets lower Friday despite robust U.S. retail sales.

KEEPING SCORE: Britain’s FTSE 100 sank 1.4 per cent to 6,371.06. Germany’s DAX fell 1.6 per cent to 9,710.73 and France’s CAC 40 declined 1.6 per cent to 4,160.27. U.S. futures showed Wall Street was headed for a sell-off. S&P 500 futures fell 0.7 per cent to 2,010.40. Dow futures dropped 0.7 per cent to 17,382.

CHINA DATA: A source of caution for investors on Friday was data from China. China’s factory output growth declined to 7.2 per cent in November from 7.7 per cent growth in October and 8 per cent in September. Growth in investment in factories and other fixed assets slowed slightly to 15.8 per cent for the first 11 months of the year from 15.9 per cent in the first 10 months. The data came after Chinese leaders at an annual planning meeting affirmed their commitment to the “new normal” of slower growth as they try to steer China toward a more sustainable expansion based on domestic consumption.

THE QUOTE: “Overall, there is no sign of a quick reversal of the growth downtrend” in China, said Citigroup economists Shuang Ding and Minggao Shen in a report. Growth in the worlds’ No. 2 economy might fall to 7.1 per cent in the current quarter and below 7 per cent early next year, Ding and Shen said. Growth of 7.3 per cent in the third quarter was a five-year low.

ENERGY: Benchmark U.S. crude was down 77 cents to $59.18 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 99 cents to settle at $59.95 a barrel on Thursday, its first time below $60 a barrel in more than five years. Brent crude, a benchmark for international oils, dropped 68 cents to $63 on the ICE futures exchange in London. The lower energy costs have freed up money for consumers but stocks of energy companies have taken a beating.

ASIA’S DAY: Gains in some Asian markets narrowed in the afternoon. Tokyo’s benchmark Nikkei 225 rose 0.7 per cent to 17,371.58 and South Korea’s Kospi added 0.3 per cent to 1,921.71. China’s Shanghai Composite climbed 0.4 per cent to 2,938.17. Stocks in Southeast Asia also rose but Australia’s S&P/ASX 200 fell 0.2 per cent to 5,219.60. Hong Kong’s Hang Seng erased earlier gains closing down 0.3 per cent at 23,249.20.

US RETAIL: American retail sales perked up in November as cheaper gas and an improving job market fueled a promising start to the holiday shopping season. Retail sales advanced 0.7 per cent, the highest in eight months. Excluding gas stations, whose sales were dented by falling gasoline prices, sales climbed 0.9 per cent.

CURRENCIES: The euro rose to $1.2423 from $1.2398 while the dollar fell to 118.38 yen from 118.92 yen.