Global markets saw gains on Tuesday after China reported that its second-quarter economic growth aligned with expectations, easing investor concerns and boosting sentiment. This came alongside optimism that global leaders will work to avert the harshest outcomes of U.S. presidential frontrunner Donald Trump’s renewed tariff threats.
China’s gross domestic product (GDP) rose by 5.2% from April to June, supported by a spike in exports as businesses rushed to ship goods ahead of anticipated U.S. tariffs. The figure, though slightly slower than the previous quarter, matched forecasts from an AFP poll.
Strong export performance, including a notable rebound in shipments to the United States, bolstered industrial output, which surpassed projections. However, retail sales growth disappointed at just 4.8% in June, falling short of Bloomberg estimates and revealing continued weakness in consumer spending.
“Recent efforts to boost spending, such as the consumer goods trade-in scheme, offered only temporary support,” said Sarah Tan, an economist at Moody’s Analytics. “Its limitations point to deeper structural issues that need attention.”
China’s economic recovery continues to face headwinds from its ongoing trade tensions with the U.S. Despite a framework agreement reached last month in London, uncertainties remain. Trump escalated the pressure again on Monday, threatening 100% tariffs on trade partners allied with Russia unless Moscow ends its war in Ukraine within 50 days.
Despite these geopolitical tensions, market reactions remained largely positive. Hong Kong’s Hang Seng Index climbed 1.6%, while Tokyo’s Nikkei 225 rose 0.6%. Gains were also recorded in Sydney, Seoul, Singapore, Taipei, Jakarta, Mumbai, and Wellington, alongside London, Frankfurt, and Paris. Shanghai and Manila posted losses.
Investor confidence also got a boost after U.S. tech firm Nvidia announced it would resume sales of its H20 AI chips to China, following a U.S. decision to lift licensing restrictions. U.S. futures rallied on the news.
Trump’s fresh trade threats included a new round of anti-dumping duties on Mexican tomatoes and a potential 30% tariff on goods from both Mexico and the EU if trade deals are not reached by August 1. However, analysts view these threats as typical negotiation tactics, referencing similar past reversals.
Wall Street reflected the optimism, with the Nasdaq closing at a record high. Meanwhile, Bitcoin slipped after briefly surpassing $123,200 on Monday amid expectations of favorable regulatory reforms for crypto assets in the U.S.
Key Market Figures:
- Tokyo – Nikkei 225: +0.6% at 39,678.02 (close)
- Hong Kong – Hang Seng Index: +1.6% at 24,590.12 (close)
- Shanghai – Composite: –0.4% at 3,505.00 (close)
- London – FTSE 100: +0.1% at 9,004.23
- Euro/dollar: $1.1690
- Pound/dollar: $1.3447
- Dollar/yen: ¥147.65
- WTI Crude: –0.9% at $66.37 per barrel
- Brent Crude: –0.8% at $68.66 per barrel
- Dow Jones (New York): +0.2% at 44,459.65 (close)
Markets remain cautiously optimistic as trade negotiations continue and investors weigh economic data against political developments.