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A Chinese woman lets fly a toy shaped like a bird in front of a giant Chinese flag in Beijing (Ng Han Guan)
A Chinese woman lets fly a toy shaped like a bird in front of a giant Chinese flag in Beijing (Ng Han Guan)

Market Blog

It's all about China Add to ...

China's roiling the equity and metals markets again -- and this time, it's because of powerful growth. It looks like investors across the world have little faith in Beijing's ability to manoeuvre a soft landing for the world's second-largest economy.

China's economy grew by 9.8 percent in the fourth quarter of 2010, up from 9.6 percent in the previous three-month period. The news fueled speculation that the monetary authorities will have to do more to cool the economy and ease inflationary pressures.

Japan's Nikkei 225 stock average closed down 1.1 percent at 10,437.31 while Hong Kong's Hang Seng index shed 1.7 percent to 24,003.70. South Korea's Kospi lost 0.4 percent to 2,106.66, a day after finishing at a new record high of 2,115.69. The benchmark Shanghai Composite Index dived 2.9 per cent to 2,677.65. The Shenzhen Composite Index for China's smaller, second market slid 3.4 per cent to 1,170.47.

Key European bourses were lower in early trading: Britain's FTSE 100, by 0.8 per cent to 5,926.91; Germany's DAX, by 0.4 per cent to 7,056.44; and France's CAC-40, by 0.4 per cent to 3,960.78.

Wall Street faced another slack session as well. Dow futures were down 0.3 per cent to 11,757 and broader S&P 500 futures were lower by 0.2 per cent to 1,275.40.

Benchmark crude for March delivery was down 14 cents at $90.72 (U.S.) a barrel in electronic trading on the New York Mercantile Exchange. The contract lost 50 cents to settle at $91.81 on Wednesday.

Copper prices fell. Three-month copper on the London Metals Exchange, traded at $9,495 a tonne, after a last quote of $9,570,9575 a tonne on Monday. The metal struck a record $9,781 a tonne on Wednesday, bolstered by tightening world supply due to global labour issues and falling ore grades in major producing countries such as Chile, and supported by demand from China, the world's top metal consumer.

Gold eased, following three days of gains, after a steadier U.S. dollar undermined some investment demand, although Asian consumer buying prevented the price from sliding too far. Spot gold fell 0.4 percent to $1,365.20 an ounce, but was still on track for a 0.3 percent gain this week, its first weekly rise in three weeks. U.S. February gold futures were down 0.5 percent at $1,364.00.

Platinum fell after two consecutive days of rallies that took the price to its highest since July 2008. Spot platinum fell 0.4 percent to $1,824.50 an ounce.

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