Asian stocks hit a two-year high on Monday, boosted by stronger-than-expected economic growth in China and bets that lacklustre U.S. data will keep the Federal Reserve cautious about the pace of policy tightening. Silvia Antonioli reports
Asian stock markets hitting a fresh 2-year high boosted, this time, by strong Chinese GDP data. The world's second largest economy is growing faster than expected-- at 6.9% in the second quarter. That's thanks to a pickup in industrial output, retail sales and exports. Chinese blue chips staged a quick turnaround after the data paring earlier heavy losses and the good news from China lifted European markets too. But analysts doubt China can keep this pace of growth SOUNDBITE (English) JAMES BEVAN, CHIEF INVESTMENT OFFICER, CCLA "I certainly anticipate that we should expect slower growth. But the real issue is not whether growth slows but whether or not it disappears over the edge of the cliff. And that's not a view that I currently hold and therefore we anticipate the markets will be relatively relaxed even if growth slows from the current rate." European markets opened higher in the first trading day following their strongest week in more than 2 months. Mining stocks like AngloAmerican and Glencore among the biggest risers. They rely heavily on Chinese demand for their metals. Also gaining: Nordic telecom firm Telenor and British engineering group Weir. Their shares jumped after an upgrade in their 2017 outlook. SOUNDBITE (English) JAMES BEVAN, CHIEF INVESTMENT OFFICER, CCLA "I look at the fundamental data coming out of the European economy and I see strong performance at the company level. I see decent lead indicators and I see no expectation that the European Central Bank will remove the punch bowl. Yes. And on that basis the optimism that is baked into the cake of European equities may have further to run and moving on to the Eurozone." Investors are also weighing the diminished chance of a Fed rate hike in December They bet recent U.S. data pointing to tame inflation and soft demand will push further tightening back.