subscribe to our newsletter sign up

Market reacts to China’s slouch, commodities take a hit

Market reacts to China’s slouch, commodities take a hit

Concerns that China’s economy may have peaked, potentially sparking a global knock-on effect, is premature at this stage, says an investment director, despite commodities taking a hit. 

Investors have been concerned that Beijing’s efforts to rein in a credit bubble will start to wear away at growth, precipitating corporate defaults and squeezing investment demand.

However, Acorns Grow Australia chief executive George Lucas believes otherwise, saying 2017 will be a politically important year for China, with President Xi Jinping set to preside over a change to the Communist Party’s key personnel at the five-year National People’s Congress.

“Investors need to remember that there is a lot of incorrect reporting of China’s peak and that it may continue to reach new heights, just at a lower rate of growth,” Mr Lucas said.

“If there are signs of fragility in the economy after June, we would expect the government to relax credit policies to kickstart the economy.”

Concerns about China have also seen oil prices face a recent decline, with the key commodity falling by 7 per cent last week, as China has been a key source of demand.

Oil is being hit further by a lack of market confidence in OPEC’s ability to overpower the resurgent US shale industry.

Oil had its biggest weekly drop in a month, while WTI and Brent benchmarks fell by more than 7 per cent, their biggest falls since early March.

Market reacts to China’s slouch, commodities take a hit
Market reacts to China’s slouch, commodities take a hit
nestegg logo
subscribe to our newsletter sign up
FROM THE WEB
Recommended by Spike Native Network
Anonymous - Why does this get all the media attention when in reality it affects very few and the charges are minimal? How about reporting on all the ISA TPD.......
Anonymous - This got to be the smartest comment this century ?!....
nan - So what do you do if you are being ripped of and then can't afford the body corporate fees....
MarkL - The banks may not charge dead people any more ........... but they won't charge them any less either!....