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World stocks rally falters after steady China GDP growth

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LONDON – A global stocks rally stuttered Wednesday as dealers mulled Chinese growth numbers, ahead of the final US presidential debate and on the eve of a eurozone interest rate decision.

London equities lost 0.2 percent, while Frankfurt and Paris each shed 0.1 percent in value.

Europe was handed an underwhelming session from Asia, where Shanghai finished flat and Hong Kong dipped, while Tokyo, Sydney and Singapore found higher ground.

China’s economy grew 6.7 percent in the third quarter or July-September, compared with a year earlier, data showed Wednesday.

That matched the annual clip from both the first and second quarters, and chimed with expectations — but raised eyebrows among some analysts.

“Equities are back in the red as investors digest suspiciously stable China GDP growth, whilst gearing up for another round of Trump versus Clinton — and pondering what Mario Draghi and his European Central Bank will do,” said Mike van Dulken, research boss at traders Accendo Markets.

Democrat Hillary Clinton and her Republican rival Donald Trump wade into their last presidential debate later Wednesday, with the latter sliding in opinion polls amid allegations of sexual misconduct and wild charges of a “rigged” US election.

Dealers will also be keenly following an ECB meeting on Thursday after speculation it is considering tapering its vast quantitative easing (QE) stimulus.

Despite the chatter, some analysts expect it to maintain its easing programme and possibly flag fresh measures in December.

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China’s latest growth figures meanwhile came as some relief following a years-long slowdown in China that has been a major drag on economies from Asia to the Americas.

While that figure is within the government’s target of 6.5-7.0 percent for the year, it compares to the 6.9 percent annual rate in 2015, the slowest pace in a quarter of a century.

‘Persistent concerns’ over China 

FXTM analyst Lukman Otunuga cautioned however that there were still question marks over the economy’s future path.

“Global markets were slightly unmoved during early trading on Wednesday as investors re-evaluated China’s third quarter GDP,” added Otunuga.

“The world’s second largest economy continues to display signs of economic stability with GDP, inflation and retail sales following a positive path.

“Although sentiment is slowly improving towards the nation, persistent discussions over asset bubbles, high debt levels, and a cooling housing market could spark concerns over future economic growth.”

China’s yuan benefited from the data release, climbing against the dollar for the first time in eight sessions.

The greenback struggled to recover from Tuesday’s losses against the yen after dealers were left unimpressed by US inflation data which analysts said did nothing to strengthen the case for a US interest rate rise.

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However, the US unit made inroads against the euro and pound, which rallied Tuesday on a near two-year high reading on British inflation.

Key figures at 1130 GMT 

London – FTSE 100: DOWN 0.2 percent at 6,987.40 points

Frankfurt – DAX 30: DOWN 0.1 percent at 10,616

Paris – CAC 40: DOWN 0.1 percent at 4,504.90

EURO STOXX 50: DOWN 0.1 percent at 3,044.20

Tokyo – Nikkei 225: UP 0.2 percent at 16,998.91 (close)

Hong Kong – Hang Seng: DOWN 0.4 percent at 23,304.97 (close)

Shanghai – Composite: UP 24.60 points at 3,084.72 (close)

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New York – DOW: UP 0.4 percent at 18,161.94 (close)

Euro/dollar: UP at $1.0997 from $1.0979 Tuesday

Dollar/yen: DOWN at 103.46 yen from 103.87 yen

Pound/dollar: UP at $1.2317 from $1.2295

Euro/pound: DOWN at 89.28 pence from 89.29 pence

Oil – West Texas Intermediate: UP 65 cents at $50.94 per barrel

Oil – Brent North Sea: UP 60 cents at $52.28

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