SYDNEY- Asian shares steadied on Wednesday after Chinese economic data suggested Beijing’s stimulus measures might finally be gaining traction, though a blast at a Gaza hospital dealt a blow to hopes for containing the conflict there.
Global bond markets also still nursed heavy losses as strong US retail data argued for a punishingly long stretch of high rates.
The outlook for the world economy did take a small turn for the better as China reported annual economic growth of 4.9 percent in the third quarter, beating forecasts for 4.4 percent .
Retail sales and industrial output for September also surprised on the upside, suggesting activity had been gaining momentum.
That helped Chinese blue chips pare early losses to be down 0.2 percent , though the initial reaction was muted overall.
The mood had been darkened as Israeli and Palestinian authorities traded blame for the blast that killed hundreds at a Gaza hospital, complicating US President Joe Biden’s already fraught trip to the region.
The news contributed to a spike in oil prices as investors worried Iran or other nations could get pulled in.
“We judge the risks are tilted towards escalation and spread of the Israel-Hamas conflict to other countries in the Middle East,” warned analysts at CBA in a note. “A major spike in volatility and a downgrade of the global economic growth outlook is possible.”
The cautious mood left MSCI’s broadest index of Asia-Pacific shares outside Japan a shade lower, while Japan’s Nikkei dipped 0.2 percent .
EUROSTOXX 50 futures slipped 0.2 percent , while FTSE futures were flat. S&P 500 futures and Nasdaq futures both eased 0.2 percent .
Tech stocks were dragged in part by a drop in Nvidia after news the Biden administration plans to halt shipments to China of more of its advanced artificial intelligence chips.
Stocks were also pressured by a jump in bond yields after a barnstorming report on September US retail sales sent analysts scurrying to revise up forecasts for economic growth for both the third and fourth quarters. -Reuters
