Latest news with #stimulus
Reuters
16 hours ago
- Business
- Reuters
Breakingviews - Beijing grabs old dam playbook to energise growth
HONG KONG, July 23 (Reuters Breakingviews) - Beijing is digging into the past to unleash a 1.2 trillion yuan ($170 billion) stimulus. Construction started in Tibet over the weekend on one of the world's largest hydroelectric dams. It can help the country meet its energy demands and emissions-reduction targets. It also signals that Chinese President Xi Jinping is reviving the tried-and-tested tactic of using mega infrastructure spending to reboot economic growth. Huge dams have been central to planners' thinking in previous economic cycles. Perhaps the most well-known, the Three Gorges, contributed to a quick rebound after the Asian financial crisis in 1998. A big dam boom, which catapulted the People's Republic into being the world's biggest, opens new tab hydropower producer, also supported Xi's last major campaign to fight overcapacity in 2015. Those are the same pressures China's economy is facing now. Granted, the new super dam won't have the same stimulative impact on an economy which has grown 19-fold to $19 trillion since construction on the Three Gorges began in earnest. But it's still notable. The first year of construction could add almost a tenth of a percentage point to GDP in its first year of construction, per Citi analysts, thanks to demand for cement, steel and other products. Stock and commodity players cheered the news, with iron ore futures, for example, hitting a more than four-month high. That optimism, though, is rooted in investors' assumptions that the dam is not a one-off, but part of a broader push to underpin China's economy with major infrastructure projects. There are risks to the Tibetan dam. Further downstream the river flows into India, which will be concerned about water security. While more hydropower will eventually help reduce China's greenhouse gas pollution, building it will add to them. It'll require around 30 million tons of cement, per Morgan Stanley, equivalent to two years of China's current production. It'll need plenty of steel, too. Those two industries combined account for almost a fifth of global carbon emissions. Moreover, dams are not immune to climate change. Drought in Sichuan in 2022, for instance, prompted all manner of electricity-use restrictions. For Beijing the benefits outweigh the negatives. If electricity consumption is a better economic indicator, opens new tab than official GDP figures, as former Premier Li Keqiang once said, the renewed urgency in adding more hydropower speaks volumes about Beijing's economic plan.
Bloomberg
20 hours ago
- Business
- Bloomberg
Sri Lanka's Central Bank Leaves Key Rate Unchanged as US Tariffs Loom
Sri Lanka's central bank left its benchmark rate unchanged as policymakers gauge the progress of trade negotiations with the US before delivering additional stimulus. The Central Bank of Sri Lanka kept the overnight policy rate at 7.75% on Wednesday. Seven of 10 economists surveyed by Bloomberg expected the single policy rate to be left unchanged, while the rest saw a 25 basis point cut for a second-consecutive meeting. The bank in May unexpectedly cut the benchmark rate, resuming its policy easing cycle to bolster economic recovery in an uncertain global environment.
Bloomberg
2 days ago
- Business
- Bloomberg
China's Swap Curve Normalizes as Deflation Fears Begin to Ease
A distortion in China's money market has vanished after persisting throughout this year, a nascent sign that investors expect the latest stimulus efforts to reflate the economy. The country's five-year interest-rate swaps, a popular hedging tool, climbed above their one-year counterpart on Friday and have since widened the gap to three basis points, according to data compiled by Bloomberg. That helped end a discount that was as steep as 15 basis points in February — when deflation fears were deeply entrenched.
Zawya
2 days ago
- Business
- Zawya
British stocks inch higher as China stimulus hopes buoy miners
London's main stock indexes nudged higher on Monday, supported by industrial metal mining stocks that jumped on hopes of a stimulus from the world's largest commodity consumer, China. The internationally-oriented FTSE 100 was up 0.1% as of 0929 GMT, after logging its fourth straight week of gains on Friday, while the domestically-oriented midcap FTSE 250 index rose 0.3%. The blue-chip index had surged to all-time highs last week as investors took comfort in a relatively U.S. tariff-shielded market, higher commodity prices and hopes of a Bank of England rate cut. On the day, the UK industrial metal mining stocks index led sectoral gains with a 3.3% rise, tracking a rise in metal prices after China vowed to stabilise its industrial growth, and on hopes for more stimulus from the world's largest commodity consumer. Miners Glencore gained 3.7%, Anglo American rose 3.5%, Antofagasta advanced 3.3%, and Rio Tinto up 2.8%. Banks and financial services were down 0.3%, with Standard Chartered losing 0.9%, while Barclays fell 0.6%. The Bank of England has asked some lenders to test their resilience to potential U.S. dollar shocks, three sources told Reuters. Aerospace and defence index lost 1.1%, led by a 2.1% fall in BAE Systems. The UK's personal goods index lost 1.6%, dragged down by Burberry that lost 1.9% after surging to a near 17-month high on Friday. Meanwhile, a Deloitte survey showed British consumer sentiment had a marked fall for the first time in nearly three years last month, reflecting increased worries about job security. Property site Rightmove said that asking prices for newly advertised British houses and apartments recorded their biggest July fall in more than 20 years this month. In corporate updates, BP named Albert Manifold, the former boss of building materials producer CRH, as its new chairman on Monday. The Financial Times reported on Sunday that London Stock Exchange Group is weighing whether to launch 24-hour trading and is looking into the practicalities of increasing its trading hours.
Reuters
3 days ago
- Business
- Reuters
British stocks inch higher as China stimulus hopes buoy miners
July 21 (Reuters) - London's main stock indexes nudged higher on Monday, supported by industrial metal mining stocks that jumped on hopes of a stimulus from the world's largest commodity consumer, China. The internationally-oriented FTSE 100 (.FTSE), opens new tab was up 0.1% as of 0929 GMT, after logging its fourth straight week of gains on Friday, while the domestically-oriented midcap FTSE 250 index (.FTMC), opens new tab rose 0.3%. The blue-chip index had surged to all-time highs last week as investors took comfort in a relatively U.S. tariff-shielded market, higher commodity prices and hopes of a Bank of England rate cut. On the day, the UK industrial metal mining stocks index (.FTNMX551020), opens new tab led sectoral gains with a 3.3% rise, tracking a rise in metal prices after China vowed to stabilise its industrial growth, and on hopes for more stimulus from the world's largest commodity consumer. Miners Glencore (GLEN.L), opens new tab gained 3.7%, Anglo American (AAL.L), opens new tab rose 3.5%, Antofagasta (ANTO.L), opens new tab advanced 3.3%, and Rio Tinto (RIO.L), opens new tab up 2.8%. Banks and financial services (.FTNMX301010), opens new tab were down 0.3%, with Standard Chartered (STAN.L), opens new tab losing 0.9%, while Barclays (BARC.L), opens new tab fell 0.6%. The Bank of England has asked some lenders to test their resilience to potential U.S. dollar shocks, three sources told Reuters. Aerospace and defence index (.FTNMX502010), opens new tab lost 1.1%, led by a 2.1% fall in BAE Systems (BAES.L), opens new tab. The UK's personal goods index (.FTNMX402040), opens new tab lost 1.6%, dragged down by Burberry (BRBY.L), opens new tab that lost 1.9% after surging to a near 17-month high on Friday. Meanwhile, a Deloitte survey showed British consumer sentiment had a marked fall for the first time in nearly three years last month, reflecting increased worries about job security. Property site Rightmove said that asking prices for newly advertised British houses and apartments recorded their biggest July fall in more than 20 years this month. In corporate updates, BP (BP.L), opens new tab named Albert Manifold, the former boss of building materials producer CRH (CRH.N), opens new tab, as its new chairman on Monday. The Financial Times reported on Sunday that London Stock Exchange Group (LSEG.L), opens new tab is weighing whether to launch 24-hour trading and is looking into the practicalities of increasing its trading hours.
