World stocks choppy on tepid China recovery signs

"The biggest concern amongst these numbers here is the (5 per cent) rise in food prices, making it difficult for Chinese authorities to take any measures to loosen policy further, to boost growth"

Global stock markets were choppy on Friday after China reported improved but still tepid economic data.

Producer prices, or the price of goods as they leave factories, fell in July but at a slower rate than the month before a sign that demand may be strengthening following a prolonged slump. Production prices fell 2.3 percent compared with a year earlier, but the result was better than June’s 2.7 percent drop, the government reported. Food prices rose 5 percent.

Retail sales and industrial production data were mixed. The official

Xinhua news agency quoted the National Bureau of Statistics as saying that retail sales grew 13.2 percent in July from a year earlier, slightly down from June’s growth rate. However, industrial production grew 9.7 percent, up from June’s 8.9 percent and the highest year-on-year growth in five months.

“The biggest concern amongst these numbers here is the rise in food prices ... making it difficult for Chinese authorities to take any measures to loosen policy further, to boost growth,” Michael Hewson of CMC Markets said in an email.

European stocks were mixed in early trading. Britain’s FTSE 100 rose 0.2 percent to 6,543.16. Germany’s DAX shed 0.2 percent to 8,305.8 and France’s CAC—40 lost 0.2 percent to 4,056.02.

Wall Street looked headed for early losses. Dow Jones industrial futures were down 0.2 percent to 15,416. S&P 500 futures were 0.2 percent down at 1,689.70.

On Thursday, customs data showed Chinese exports and imports both increased in July, beating expectations and easing concerns over the slowdown that has dragged down growth in the world’s second-biggest economy to a two-decade low.

Japan’s Nikkei 225 index vacillated throughout the day but ended 0.1 percent higher at 13,615.19. South Korea’s Kospi gave up early gains to close 0.2 percent lower at 1,880.71.

China’s Shanghai Composite Index gained 0.4 percent to 2,052.24 and the Shenzhen Composite Index for China’s second, smaller stock market gained 0.2 percent to 996.42.

Geely Automobile Holdings jumped 5.8 percent in Hong Kong while Greatwall Motor advanced 4.7 percent. Linus Yip, strategist at First Shanghai Securities in Hong Kong, said consumer and auto shares were advancing on the back of improving sentiment, due to the perception of a modest improvement on the Chinese mainland.

“The economy in mainland China is coming back gradually so the market focus returns to consumer stocks. I think it’s reasonable,” Mr. Yip said.

Benchmark oil for September delivery was up 40 cents to $103.80 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 97 cents to close at $103.40 on the Nymex on Thursday.

In currencies, the euro rose to $1.3383 from $1.3377 late Thursday. The dollar fell to 96.64 yen from 96.82 yen.