LONDON (AP) — Relief over China's economic growth rate helped shore up the mood in financial markets Monday ahead of a raft of U.S. corporate earnings and retail sales figures.
The world's second-largest economy grew 7.5 percent from a year earlier in the second quarter. Though the figure is down on the previous quarter's 7.7 percent, there had been fears that it may have fallen below 7 percent in the wake of efforts by the country's monetary authorities to clamp down on risky lending. A sharp drop would hurt companies around the world that have become increasingly reliant on breakneck Chinese growth to boost earnings.
"China's growth rate might still be on a steadily declining path, but investors were happy enough to see it come in line with expectations, growing by 7.5 percent in the second quarter," said Chris Beauchamp, market analyst at IG. "Beijing was keen to emphasise that internal consumption was picking up the slack, and helpfully retail sales rose strongly during June."
Combined with an easing in tensions over Europe's financial crisis and diminishing fears about the Federal Reserve's plans to rein in its monetary stimulus, the figures bode well for markets.
"We could be in for a week of quiet, steady gains for stock markets," he said.