US stocks rise as FTSE 100 closes in the red

FTSE  Screens on the trading floor at New York Stock Exchange (NYSE) display the Federal Reserve Chair Jerome Powell during a news conference after the Federal Reserve announced interest rates will raise half a percentage point, in New York City, U.S., December 14, 2022. REUTERS/Andrew Kelly
FTSE and Wall Street investors will be keeping an eye on Federal Reserve Chair Jerome Powell's two-day biannual monetary policy testimony on Capitol Hill. Photo: Andrew Kelly/Reuters

The FTSE 100 and European stocks were mixed this Monday after China tempered a rally in shares with its modest economic growth target.

The FTSE 100 (^FTSE) fell 0.28% to close at7,925 points, while the CAC 40 (^FCHI) in Paris climbed 0.39% to 7,377 points. In Germany, the DAX (^GDAXI) rose 0.52% to 15,658.

China will aim for an economic expansion of “around 5%” for 2023, its lowest target for more than three decades.

The forecast, which was disclosed by premier Li Keqiang at the annual National People’s Congress on Sunday, follows last year’s second slowest growth rate since 1976.

Neil Wilson at said: “Caution seemed the order of the day across markets early on Monday as China set itself one of the lowest gross domestic product target in many years, hinting to investors that the big reopening boom may not be as positive for the global economy as hoped.”

“Beijing set a target of around 5% growth this year, creating a relatively low bar for the regime to clear. Oil and other industrial commodities slipped on the news, whilst basic resources stocks in London were hit, dragging the FTSE 100 marginally into the red at the open,” he added.

Across the pond, US stocks edged higher, kicking off the start of a busy week. The Dow Jones (^DJI) rose 0.25% to 33,474 points. The S&P 500 (^GSPC) gained 0.56% to 4,068 points and the tech-heavy NASDAQ (^IXIC) advanced 0.92% to 11,797.

Looking ahead to this week, traders will be focused on Federal Reserve chair Jerome Powell’s testimony to Congress on Tuesday and Wednesday and the publication of the monthly non-farm payrolls report on Friday.

The events should help Wall Street build a picture about the potential for further interest rate rises in the spring and the type of landing faced by the US economy.

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"Looking at the latest set of data, the U-turn of easing inflation and last month's blowout jobs figures, we don't expect to hear anything less than hawkish from Powell. But it's always possible that a word like 'disinflation' slips out of his mouth, and that we get a boost on risk," said Swissquote Bank's Ipek Ozkardeskaya.

Deutsche Bank strategist Jim Reid said: “it's hard to see how Powell can be too confident about where the Fed is going to land.

“He may provide clues as to what employment and inflation numbers need to do to make the Fed act in a particular way, especially how it pertains to whether 0.5% hikes are back on the table.”

In London, Shell (SHEL.L) was up 0.37% after its new CEO said that the US was a more attractive proposition for energy investment than the UK.

Wael Sawan told The Times that the UK government should look to the US' recent actions, such as the Inflation Reduction Act, which gives a $369bn subsidy package to encourage domestic green investment.

Sawan said he would "think twice" about further oil investment, citing "more attractive" propositions, such as the US Gulf of Mexico.

London has been struggling to attract companies to list in its bourse and now WANdisco has become the latest firm to say it was looking at an additional listing in the US although it stressed it remained committed to the AIM market.

Sky News said that WANdisco (WANSF), a 'big data' business with a valuation of close to £1bn, has hired bankers from Evercore Partners to prepare for a listing in New York.

Looking at the blue chip index, Paddy Power owner Flutter (FLTR.L) was the biggest riser, climbing 4.23%.

Miners led the losses after the disappointing Chinese growth targets: Anglo American (AAL.L) lost 3.37%, Rio Tinto (RIO.L) fell 2.71% and Antofagasta (ANTO.L) slipped 1.29%.

Read more: Arm chooses New York for key technology listing in 'kick in the teeth' for London

Meanwhile, Brent crude (BZ=F) slipped and was trading at around $85barrel as optimism around top crude importer China’s reopening wavered.

In Asia, Tokyo’s Nikkei 225 (^N225) gained 1.11% to 28,237 points, while the Hang Seng (^HSI) in Hong Kong rose 0.23% to 20,615. The Shanghai Composite (000001.SS) lost 0.19% to 3,322 points.

Watch: China's Upturn Is Inevitable, Says BNY Mellon's Mitra

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