Markets remained shaky on Tuesday despite the EU rescue plan. From Bloomberg:
Stocks fell, led by commodity producers and banks, and oil and copper slid on skepticism an almost $1 trillion European loan package will halt the region’s debt crisis. The pound gained as Conservative leader David Cameron was appointed prime minister. Gold rose to a record.
The Standard & Poor’s 500 Index lost 0.3 percent at 4 p.m. in New York following a 4.4 percent jump yesterday after the European plan was announced. The MSCI World Index dropped 0.7 percent. Oil fell on a stronger dollar, while copper slid on concern growth will slow in Europe and China. The pound rose 0.8 percent to near $1.50 and added 1.5 percent versus the euro on speculation Cameron will form a coalition with Liberal Democrats and take aggressive steps to cut the deficit. Ten-year gilt yields fell 4 basis points to 3.9 percent.
Renewed fears of another Chinese tightening didn't help. From AFP/CNA:
China said Tuesday that consumer prices and bank lending accelerated in April, fuelling fears the economy may overheat and building pressure on Beijing to hike interest rates and let its currency rise.
Property prices also had the biggest year-on-year jump in nearly five years in April, signalling measures introduced by the government in recent weeks to curb inflation and rein in soaring prices were having little effect...
The consumer price index, the main gauge of inflation, rose a higher-than-expected 2.8 percent compared with April last year, the NBS reported.
The increase outpaced the 2.4 percent jump in March but was still below the government's own inflation target of three percent for the year...
New loans issued by Chinese banks hit 774 billion yuan (113.4 billion dollars) in April after falling to 510.7 billion yuan in March while property prices rose 12.8 percent year-on-year in April, official data showed...
Urban fixed asset investment, a measure of government spending on infrastructure and a key driver of China's economy, rose 26.1 percent in the January-April period to 4.67 trillion yuan, the NBS said Tuesday.
Industrial output from the country's millions of factories and workshops rose 17.8 percent year-on-year in April, while retail sales were up 18.5 percent for the month to 1.15 trillion yuan.
On Monday, China had reported that its trade balance returned to surplus in April as exports rose 30.5 percent from a year earlier.