Global stocks mixed on China data, drop in European gas prices

NEW YORK, United States — Global stocks were mixed Tuesday following data showing China's growth slowed sharply in 2022 as European gas prices hit another 16-month low on fading fears of a winter supply crunch.

Asia's equities mostly fell as data showed the Chinese economy grew at its slowest pace in four decades last year, sparking talk of an uneven recovery as the nation emerges from debilitating zero-Covid measures.

In Europe, Frankfurt and Paris inched up half a percent as natural gas prices returned to a low not seen since September 2021 thanks to unseasonably warm weather dampening winter demand expectations.

Sentiment was also boosted by an upbeat reading on German investor confidence in January to its highest level since the start of the war in Ukraine.

"The earnings expectations of the export-oriented and energy-intensive sectors have gone up significantly," said ZEW president Achim Wambach.

Meanwhile, London lost 0.1 percent as shares in online supermarket Ocado plummeted more than nine percent following a fourth-quarter sales update.

On a busy day for US earnings, investment banking giant Goldman Sachs reported a 69 percent drop in quarterly profits to $1.2 billion, sending its shares diving more than six percent.

Poor Goldman results -- along with an earnings warning from insurer Travelers outlining the bruising hit from last month's blizzard -- pushed the Dow more than one percent lower.

In China, tough Covid-19 restrictions limited growth to just three percent in 2022, the worst year since 1976 excluding pandemic-hit 2020, as lockdowns and other containment policies hammered activity, data showed Tuesday.

That beat the 2.7 percent forecast and the fourth-quarter reading also topped estimates.

Analysts, however, offered varied appraisals of China's outlook.

Jing Liu, chief economist for Greater China at HSBC, said the "normalization path is likely to be bumpy," warning of a "big setback in the near term" followed by a strong rebound.

"The roll-out of a series of measures to ensure sufficient funding support to developers and revive housing demand will also help to stabilise the property sector," she said.

But Chaoping Zhu, of JP Morgan Asset Management, sounded a note of optimism, saying in a note: "Looking forward, we expect to see a sustained economic recovery in 2023 as a result of reopening and policy stimulus.

"Service sectors should be the early beneficiary when pent-up demand is released."

Traders are now awaiting a key policy decision Wednesday by the Bank of Japan, which comes after it surprised markets last month by announcing a shift away from its ultra-loose monetary policy, sending the yen soaring.

There will also be a focus on speeches by top finance officials at this week's annual Davos summit in Switzerland.