Chinese stocks jump as exports slow

Markets were up strongly on Tuesday, with the Shanghai Composite Index jumping 2.7 percent to extend its biggest three-day advance in 15 months.

Ironically, Chinese data on Tuesday had suggested economic weakness. Exports rose 13.4 percent from a year earlier in December, down from a 13.8 percent increase in November. Imports increased 11.8 percent compared with a 22.1 percent rise in the previous month.

For 2011 as a whole, exports rose 20.3 percent, down from an increase of 31.3 percent in the previous year. Imports rose 24.9 percent, much less than the 38.8 percent increase in 2010. The trade surplus narrowed to $155.14 billion from $181.51 billion in 2010.

However, economic data from Europe on Tuesday were positive.

The British Retail Consortium said on Tuesday that retail sales on a like-for-like basis rose 2.2 percent in December from a year earlier after having fallen 1.6 percent in November. Total sales grew 4.1 percent, up from a 0.7 percent increase in November.

The Bank of France’s business sentiment indicator for industry rose to 96 from a two-year low of 95 in November. Industrial production rose 1.1 percent in November.

To add to the good news for France, Fitch Ratings said that the country's credit rating would likely avoid a downgrade this year but other countries in the euro area, including Italy, may not be so lucky.