European shares drop as oil slide continues

TOKYO (AP) – Chinese shares were buoyed but the rest of Asian stock markets were largely flat Tuesday after China’s quarterly economic growth met expectations, calming some of the investor jitters in the region. Traders may closely track the National Association of Home Builders’ housing market index for January, the Commerce Department’s housing starts report for December, the National Association of Realtors’ existing home sales report for December, the jobless claims report, the results of the manufacturing survey by the Philadelphia Federal Reserve and Markit’s flash USA manufacturing PMI data for January.

China’s official Xinhua News Agency reported that banks’ new yuan loans during the last month fell over a year earlier, in a sign that momentum for the credit that fuels economic growth was slowing.

Data from China showed that the country’s economic growth eased to 6.8 percent in the fourth quarter from a year earlier, in line with expectations but still the slowest since the financial crisis.

MSCI’s broadest index of Asia-Pacific shares outside Japan.MIAPJ0000PUS dipped 0.1 percent, touching its lowest since 2011. There is also at least 100 million barrels of space left in United States tanks, alongside existing capacity in Asia and Europe, the IEA said. South Korea’s Kospi advanced 0.2 percent to 1,881.77. However, the strong outlook for Chinese consumption is prompting worldwide companies like Apple, Starbucks and Ikea to open more stores this year.

The Shanghai Composite Index closed the morning up 1.64 per cent or 47.74 points at 2,961.58, while the CSI 300 – which tracks the large-caps listed in Shanghai and Shenzhen – finished at 3,173.49, up 1.37 per cent or 42.76 points.

“China, global growth and the oil market continue to cause concern and the market remains highly nervous, but at some point momentum may turn as active investors attempt to catch the bottom”.

The spot yuan was at 6.5789, barely changed from Monday s close, but offshore it weakened to 6.5935 to stand 0.2 percent adrift from the onshore rate. Though, Weak crude oil prices and worries about the global economy capped some gains.

CURRENCIES: The U.S. dollar edged up to 117.72 yen from 117.50 yen in the previous trading day.

The STOXX Europe 600 Basic Resources index, which houses major mining stocks, rose 5.7 percent, while the European oil and gas index was up 2.9 percent, tracking gains in prices of commodities such as oil, copper, nickel and aluminium.

Iran may also encounter difficulties because some of its oil infrastructure may need fix and replacement, while it may take time for its idle oilfields to be ramped up to full production potential, it said.

That trust has been challenged by perceived policy missteps over the yuan and stock markets, giving weight to a voluble clique of China bears who claim high debt levels and massive overcapacity are bound to end in tears.

We’ve known for the last three years that the Chinese authorities are slowing down the economy.

ENERGY: Benchmark U.S. crude was down 21 cents to $30.18 a barrel in electronic trading on the New York Mercantile Exchange.

All main sectors rose. Nickel prices also rose.

Top-rated German bond yields rose as investors favored riskier assets, such as stocks.

Growth for 2015 as a whole hit 6.9 percent after the fourth quarter slowed to 6.8 percent

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