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US stocks rise as investors brace for busy week of corporate earnings

European stocks followed Asia lower on Monday, as weak Chinese economic data reinforced investors’ concerns that the world’s second-largest economy was struggling to bounce back after three years of severe pandemic restrictions. 

Europe’s regionwide Stoxx 600 lost 0.5 per cent at the opening bell, extending losses from the previous session, as the index was dragged down by steep declines in consumer cyclicals and energy companies.

France’s Cac 40 dropped 0.8 per cent, Germany’s Dax gave up 0.4 per cent and London’s energy-heavy FTSE 100 fell 0.3 per cent.

The declines echoed Asian markets, where China’s benchmark CSI 300 index slipped 0.8 per cent on Monday, after official data showed the country’s second-quarter growth rate slowed considerably from the previous three-month period. 

China’s gross domestic product expanded 0.8 per cent in the three months to July, down from 2.2 per cent in the previous quarter, as falling exports, weak retail sales and a moribund property sector weighed on growth.

China’s “revival is losing steam after the initial release of pent-up demand built during the zero-Covid policy era, while exports are falling amid ebbing global demand”, noted Duncan Wrigley, chief China economist at Pantheon Macroeconomics. 

The disappointing data weighed on oil prices, with Brent crude, the international benchmark, falling 1.2 per cent to trade at $78.93 per barrel, while US marker West Texas Intermediate fell by the same margin to $74.52. China is the world’s second-largest oil consumer after the US.

Investors’ focus will switch to the upcoming meeting of China’s ruling politburo later in the month, where policymakers are expected to consider further possible support for the economy.

Elsewhere in Asia, South Korea’s Kospi slipped 0.4 per cent, while Hong Kong’s stock exchange suspended trading owing to a weather warning and Japanese markets were closed for a holiday.

Meanwhile, traders readied for the Federal Reserve Bank of New York to issue its Empire State Manufacturing Survey later in the day, with the index expected to have come in at minus 4.3 in July, down from 6.6 in the previous month.

The negative reading means the majority of survey respondents reported an overall contraction in factory activity, as the sector faltered following a prolonged period of rising US interest rates. 

US futures were mixed, with contracts tracking Wall Street’s benchmark S&P 500 losing 0.1 per cent, while those tracking the tech-heavy Nasdaq 100 gained 0.1 per cent ahead of the New York open. 

With the earnings season well under way, traders turn their attention to tech companies this week; the electric-car maker Tesla is on Wednesday the first of the sector’s giants to report results.

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