Market update: China Q4 GDP growth delights markets

US markets rallied hard on Thursday, as improving US economic data points buoyed the markets. The S&P 500 gained 0.6%, to reach its highest level in more than five years at 1,480.94. Both the Dow Jones and Nasdaq were also up 0.6%. Weekly initial unemployment claims hit a 5-year low to a seasonally adjusted 335,000, while housing starts surged to its highest level in more than four years, up 12.1% to an annual rate of 954,000 units in December. Bank of America and BlackRock’s quarterly earnings report exceeded analyst forecasts, although Citigroup disappointed. Asian markets also ended Friday on a high; in Japan the Nikkei surged 2.9%, the Shanghai Composite gained 1.4% and the Hang Seng closed 1.1% higher.

The bullish market sentiment across the Atlantic has carried over to Europe this morning, and the markets have woken up to the news that the Chinese economy’s Q4 growth was slightly more than estimated, at 7.9% year-on-year, possibly pointing to a better performance this year. The world’s second largest economy posted growth of 7.8% for 2012 as a whole. In early trade, the FTSE Eurofirst 300 is down 0.1% while the FTSE 100 is up 0.3%. German 2-year government bond yields have risen by 0.25%, as traders fret over early bank repayments relating to 3-year European Central Bank loans. Meanwhile, this morning the Office for National Statistics reported that UK retail sales were down 0.1% in December, or an annual rise of 0.3%. Economists had forecast a month-on-month rise of 0.2%.