17 Jan 2012: China’s GDP grows 8.9% in Q4

INDICES POINTS CHANGE
FTSE 100 5720 Up 111bp
S&P 500 1289 Down 49bp
NIFTY 50 India 4962 Up 182bp

Major Stories

  • China’s Q4 GDP grows
    • China’s Q4 GDP has grown 8.9%
    • This came after Govt actively tried to reign in the inflation from Q1
    • Q1, Q2, Q3 growths were 9.7%, 9.5%, and 9.1%
    • Analysts believe that this gradual slowdown has engineered a ‘soft-landing’ for China; price increases have fallen from 6.5% in July to 4.5% in December
  • S&P downgrade European Bailout fund
    • S&P stripped the European bailout fund of its AAA rating; this will potentially constrain the fund’s ability to contain the crisis
    • Following downgrades of two of the fund’s guarantors (France, Austria accounting Euro 180 billion of credit), S&P reduced the fund’s rating to AA+
    • Although the fund is easily able to cover for Ireland, and Portugal, it will need to raise debt to assure stability in Italy and Spain
    • Due to this, European leaders are planning to bring the European Stability Mechanism into existence which will be about Euro 500 billion in size
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