AP and AFP
LONDON/HONG KONG–Stock markets showed tentative signs of recovery Tuesday in spite of weak trade figures from China and nervousness over European finance ministers’ progress at a meeting focused on easing Spain’s banking crisis.
In early trading in Europe, Britain’s FTSE 100 was up 0.6 percent 5,663.38. France’s CAC-40 was up 1.05 percent at 3,190.27 while Germany’s DAX was also up 0.9 percent at 6,446.29. Futures augured slight gains on Wall Street. Dow futures were up 0.22 percent at 12,713 and S&P 500 futures were up slightly, 0.16 percent, at 1,351.30.
Early Tuesday morning, eurozone finance ministers agreed the terms for Spain’s bank bailout, with up to US$30 billion (24.4 billion euros) being made available by the end of the month. Representatives from the 27 European Union countries are expected to agree later Tuesday to grant an extension on Spain’s program of deficit cuts until 2014. The interest rate, or yield, on Spain’s 10-year bond dropped from a high Monday of 7.03 percent to 6.86 percent in morning trade.
Meanwhile, Germany’s constitutional court is to hear arguments on the legality of one of the bailout funds later Tuesday.
Stock markets in Asia declined after China said the growth rate for its imports fell in June by half from the previous month’s level to 6.3 percent while exports grew 11.3 percent, down from May’s 15.3 percent.
China’s slowing demand for oil, iron ore and other foreign goods is bad news for commodity-exporting economies and others that had been looking to relatively strong Chinese growth to help drive demand for their products.
China cut lending rates last week for the second time in a month in a bid to boost waning economic growth, but some analysts say policymakers have been too slow to react to signs of a sharp slowdown.
Shanghai closed down 0.29 percent, or 6.37 points, to 2,164.44.