World shares have mostly gained after China’s central bank released plans for supporting the stock market through share repurchases by companies and major shareholders. European markets opened mostly higher, with Germany's DAX up 0.2% at 19,617.85. In Paris, the CAC 40 gained 0.6% to 7,629.20. Britain's FTSE 100 slipped 0.3% to 8,383.20.
The European Central Bank cut its main interest rate by a quarter of a percentage point on Thursday, helping send shares higher. The future for the S&P 500 was up 0.2% while that for the Dow Jones Industrial Average was little changed.
The Chinese economy slowed further in the last quarter, data released Friday showed. That spurred expectations the government will ramp up its latest stimulus efforts. The world's second-largest economy expanded at a 4.6% annual pace in July-September, down slightly from 4.7% in the previous quarter. Growth so far this year has averaged 4.8%, below the official target of about 5%, as weakness in the property market has continued to weigh on demand.
Meanwhile, the central bank issued guidelines for state banks to provide loans to companies and major shareholders for stock repurchases as part of an effort to stabilize China’s share markets, which have languished in recent years. The loans, which can be made only by 21 designated financial institutions, will have a maximum interest rate of 2.25%, the People’s Bank of China said in a statement that underscored plans for strict oversight of the effort to support the markets.
The news helped drive a rally in Shanghai, where the Composite index gained 2.9% to 3,261.56. The benchmark for the smaller market in the southern city of Shenzhen jumped 4.1%. Shanghai’s benchmark has gained 9% in the past three months, though it had surged much higher last month with the release of new measures to counter the slowdown, before falling back as investors registered their disappointment over a lack of big government spending initiatives. Hong Kong’s Hang Seng index gained 3.6% to 20,804.11.
Also Friday, China’s large state-run banks cut their deposit rates, to 0.1% from 0.15% for demand deposits and to 1.1% from 1.35% for longer-term deposits. Elsewhere in Asia, Tokyo's Nikkei 225 edged 0.2% higher to 38,981.75 and the Kospi in Seoul shed 0.6% to 2,593.82. Australia's S&P/ASX 200 gave up 0.9% to 8,283.20. The Taiex in Taiwan gained 1.9% and the SET in Bangkok lost 0.4%. India's Sensex rose 0.3%.
On Thursday, U.S. stocks drifted around their record heights following the latest signals that the U.S. economy continues to hum. The S&P 500 finished virtually unchanged at 5,841.47. The Dow added 0.4% to 43,239.05, besting its own record set the day before. The Nasdaq composite added less than 0.1% to 18,373.61.
Nvidia and other companies in the chip industry were some of the market’s strongest after global heavyweight Taiwan Semiconductor Manufacturing Co. reported bigger profit for the latest quarter than analysts expected. In the bond market, Treasury yields rose following the latest encouraging reports on the U.S. economy.
U.S. retailers made more in sales in September than in August, and underlying growth trends within the data were better than economists expected. A separate report, meanwhile, said fewer U.S. workers applied for unemployment benefits last week, a signal that layoffs nationwide are relatively low and aren’t damaging the job market.
Such data bolster the hope that the economy could make a perfect escape from the worst inflation in generations, one that ends without a recession that many investors had seen as nearly inevitable. And with the Federal Reserve now cutting interest rates to keep the economy humming, the expectation among optimists is that stocks can rise even further. But critics are warning that stock prices look too expensive given how much faster they’ve climbed than corporate profits.
In other dealings early Friday, U.S. benchmark crude oil rose 7 cents to $70.74 per barrel. Brent crude, the international standard, gained 1 cent to $74.46 per barrel. The dollar fell to 149.94 Japanese yen from 150.21 yen. The euro rose to $1.0842 from $1.0827.
