* World shares steady after Chinese GDP; Asia up, Europe
* Dollar firms, oil down in response to slower China growth
* JPMorgan results, modest US inflation fail to make impact
* Spanish bond yields rise again
By Mike Peacock
LONDON, April 13 World shares held steady on
Friday after China's first-quarter growth failed to meet
expectations, clouding the outlook for the world's second
largest economy but raising the prospect of more policy stimulus
By 1245 GMT, the MSCI world stock index was
down 0.1 percent on the day, with Asian shares holding up well
and Europe's on the slide. U.S. stock futures pointed to a lower
open on Wall Street.
Above-forecast earnings from U.S. investment bank JPMorgan
Chase and a modest 0.3 percent rise in U.S. consumer
prices in March failed to give stocks a fillip, with the Chinese
data and a renewed rise in Spanish borrowing costs casting a
Copper and oil both retreated on concerns about demand from
China, a voracious buyer of commodities.
Chinese growth eased to an annual rate of 8.1 percent in the
first quarter from 8.9 percent in the previous quarter, below an
8.3 percent forecast and the weakest pace in nearly three years.
It was the fifth consecutive quarter of slowing GDP in the
world's most dynamic economy, on which hopes are pinned to
sustain global growth, suggesting its slowdown is not over yet
and more policy action would be needed to halt it.
"We still believe there should be more policy relaxation to
add to growth domestically and offset weakness in exports," said
Kevin Lai, economist at Daiwa in Hong Kong.
He said Thursday's stronger-than-expected Chinese new
lending data was "an indication the government is quite ready to
provide more monetary policy support to show that at least the
economy is on track for a soft landing".
MSCI's broadest index of Asia Pacific shares outside Japan
climbed 1.1 percent.
The FTSEurofirst 300 index of top European shares
shed 1 percent, on track for a fourth consecutive week of
losses. U.S. stock futures fell on concerns over Spain's rising
borrowing costs and the disappointing Chinese data.
Spain, now at the centre of the euro zone debt storm, saw
its bond yields jump again after data showing Spanish banks
borrowed heavily from the European Central Bank in March. The
cost of insuring its debt against default hit an all-time high.
The country's borrowing costs have spiked since the
government ripped up a previously agreed deficit target in
March, having dropped sharply earlier in the year thanks to a
liquidity infusion of more than 1 trillion euros by the ECB.
"This benign environment has come to an end. It's not that
easy anymore for the financing agencies in Spain and Italy to
sell their paper," said Michael Leister, strategist at DZ Bank.
OIL, COMMODITIES ON BACK FOOT
Copper led the way lower for commodities, with the London
three-month benchmark down more than 1 percent at $8,120
a tonne by 1100 GMT, on track for a second consecutive week of
"The focus is back on China at the moment, but really people
should worry more about Europe," VTB Capital analyst Andrey
Front-month Brent crude slipped 27 cents to $121.44
per barrel. The contract is poised for a fourth straight weekly
decline, matching a similar losing streak in late September.
U.S. oil dropped 48 cents to $103.17 a barrel.
Commodities' loss was the dollar's gain.
It firmed by 0.35 percent against a basket of major
currencies as the weaker-than-expected Chinese growth
spurred some risk aversion, and safe haven German government
bond futures put on half a point.
The euro and the Australian dollar eased in turn. The
common currency was down 0.3 percent on the day against the
dollar at $1.3138. It was not expected to break out of the lower
end of the $1.30-$1.35 range it has traded in since January.