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- Global markets crept up Tuesday despite China lowering its growth target.
- Markets were helped by news that Beijing announced 2 trillion yuan ($298 billion) in tax cuts for 2019.
- Follow the latest developments in markets with Markets Insider.
Global stock markets crept upward Tuesday despite China lowering its economic growth target, as the government took the sting out of the bad news by announcing a major tax cut.
Premier Li Keqiang, head of the Chinese government, announced a gross domestic product (GDP) target of 6 to 6.5% for 2019 in an annual work report. The previous goal was "about" 6.5%. In preparation for a "tough economic battle ahead," Keqiang also promised tax cuts worth 2 trillion yuan ($298 billion) for the year.
Annual GDP growth of 6% would be the slowest rate of Chinese expansion in almost three decades, according to Bloomberg. The website linked the potential slowdown to Chinese officials’ efforts to reduce debt risks, preserve the environment and combat poverty.
Analysts noted that the news was not a huge surprise, which in turn helped mute the reaction in the stock market.
"This was in fact expected and so the market reaction has been balanced by Beijing pledging support for the economy, amid growing pressure from high debt and the US-Sino trade dispute," said Jasper Lawler, Head of Research at London Capital Group.
"As more details over the economic package are released over the coming days, we could see Chinese shares extend their rally."
Here’s the roundup:
- US futures rose on the news, with those underlying the S&P 500, the Dow Jones, and the Nasdaq rising at least 0.2% as of 9:20 a.m. in London (4:20 a.m. in ET).
- China’s benchmark, the Shanghai Composite Index, gained about 0.9%; Japan’s Nikkei fell 0.4%; and the Hang Seng in Hong Kong was flat.
- In Europe, the broad Euro Stoxx 50 climbed 0.25%, Germany’s Dax rose 0.12%, and the UK’s FTSE 100 was 0.3% higher.
- China’s superrich are losing faith in the country’s economy, with some even worried it will turn into the next Venezuela
- South Korean stocks are getting pounded after the sudden breakdown of Trump and Kim’s summit
- Global markets are jittery as India-Pakistan tensions hit a near 50-year high