20th Jan 2015 07:00
LONDON (Alliance News) - London markets are forecast to start higher Tuesday, lifted by better-than-expected economic growth in China, even as the International Monetary Fund cut its global growth forecast.
The FTSE 100 is forecast to open 39 points higher at 6,6624, up from Monday's close of 6,585.53.
The International Monetary Fund downgraded its global growth outlook as positive effects of lower oil prices and the depreciation of the euro and yen are being more than offset by persistent negative forces.
In its World Economic Outlook Update released Tuesday, the Washington-based lender said the global economy is set to grow 3.5% this year, down from the prior forecast of 3.8%. For 2016, growth is projected to be at 3.7% instead of 4%.
In China, the country's economy grew at the weakest pace since early 2009 in the fourth quarter, though the growth was more than the consensus estimate, data from the National Bureau of Statistics reported Tuesday.
Gross domestic product grew 7.3% in the fourth quarter from a year ago, the same rate as in the third quarter, marking the weakest growth since the first quarter of 2009. However, the growth was stronger than the 7.2% rise forecast by economists.
"Today's data suggest that although slowing investment has continued to put downward pressure on growth, this has been offset by a pick-up in consumption and service sector activity," Julian Evans-Pritchard, China economist at Capital Economics, says.
The news lifted Asian markets, and Japan's Nikkei closed up 2.1% at 17,366.3. The Hang Seng in Hong Kong is up 0.6% at 23,885.96, and the Shanghai Composite is 1.5% higher at 3,163.881.
Brent crude is quoted at around USD48.55 a barrel Tuesday, up from last week's low of USD45.16. US benchmark West Texas Intermediate is quoted at USD47.76 a barrel.
In corporate news, full-year results are due from Unilever, half-year results are due from IG Group, and a production update has been released by Rio Tinto. William Hill has released a trading statement ahead of schedule.
By Ian Edmondson; [email protected]
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
WMH.LRio TintoUnileverBHP Billiton PLCIG