Stocks Plunge Over Slow Chinese Growth and Moody’s Warning on French Rating

October 18 00:00 2011

New York, October 18 ( – After achieving one and half month’s high on Monday, global stocks stumbled on Tuesday and government bonds rose as investors cut risks over the slower-than-expected Chinese growth data and a warning on France’s triple-A sovereign credit rating.

After rating agency Moody’s said that it was considering to slap a negative outlook on France’s credit rating in the next three months, French and German 10-year government bond yields rose to a 16-year high. Moreover, China’s annual gross domestic product growth indicated that the world’s second largest economy grew at its slowest pace since the second quarter of 2009 as it eased to 9.1 percent in July-September, slightly below forecasts of 9.2 percent.

Keith Bowman, equity analyst at Hargreaves Lansdown said, “Investors’ resolve is being tested quite considerably. The situation in Europe is still overhanging in a very large fashion and the Chinese data does add another tick in the box of worries for investors to digest.”

Emerging stocks MSCIEF lost more than 2 percent. MSCI world equity index .MIWD fell 1 percent. The benchmark index is still up more than 11 percent after hitting a 15-month low earlier this month.

US crude oil fell 0.4 percent to $86.03 a barrel. The dollar DXY gained 0.2 percent against a basket of major currencies. The euro fell 0.15 percent to $1.3710.