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By Natalie Grover

LONDON (Reuters) -Global oil benchmark Brent hit $93 a barrel on Wednesday as the risk of escalating conflict in the Middle East threatened to disrupt oil supplies from the region, with Iran calling for an oil embargo to be imposed on Israel.

Brent crude futures were up $1.33, or about 1.5%, to $91.23 a barrel at 1231 GMT. West Texas Intermediate crude (WTI) futures were up $1.28, or roughly 1.5%, at $87.94 a barrel.

Both benchmarks gained more than $3 to touch their highest levels in two weeks earlier in the session.

Markets factored in risk premiums after hundreds of Palestinians were killed in a blast at a Gaza City hospital on Tuesday that Israeli and Palestinian officials blamed on each other.

Jordan then cancelled a summit it was to host with U.S. President Joe Biden and Egyptian and Palestinian leaders. Biden arrived in Israel on Wednesday pledging solidarity in its war against Hamas, and backing its account that the Gaza hospital blast had been caused by militants.

“This turn of diplomatic fortunes again garners fear of conflict spread and therefore the leap in oil,” said John Evans of oil broker PVM.

Elsewhere in the Saudi city of Jeddah, Iranian Foreign Minister Hossein Amirabdollahian urged members of the Organisation of Islamic Cooperation to impose an oil embargo on Israel.

OPEC+ is not planning to take any immediate action on Iran’s call, two sources from the producer group told Reuters.

“A long occupation looms as the scenario that pushes Brent oil futures above $US100/bbl because it raises the risk that the Israel Hamas conflict expands and potentially draws in Iran directly,” added Vivek Dhar, an analyst at Commonwealth Bank of Australia.

Geopolitical tensions aside, other drivers are also supporting oil prices.

U.S. crude stocks fell by a much-steeper-than-expected 4.4 million barrels in the week ended Oct. 13, compared to the forecast of a 300,000 barrel fall, according to market sources citing American Petroleum Institute figures on Tuesday. [API/S]

Official U.S. government data is due later on Wednesday.

On the demand side, China’s economy grew faster-than- expected in the third quarter, official data on Wednesday showed, suggesting a recent flurry of policy measures is helping to bolster a tentative recovery.

Data also showed that the country’s oil refinery throughput in September hit a record daily rate, up 12% from a year earlier, as refiners increased run rates to cater for strong demand for transport fuel over the Golden Week holiday and improving manufacturing activity.

But analysts sounded caution on China’s economy, with the country’s real estate sector still in peril.

“The economic recovery is still in its infancy,” Moody’s Analytics economist Harry Murphy Cruise said.

Meanwhile, higher-than-expected September U.S. retail sales spurred expectations of another interest rate hike by year-end. Interest rate hikes to curb inflation can slow economic growth and reduce oil demand.

(Reporting by Natalie Grover, Arathy Somesekhar and Muyu Xu; editing by Lincoln Feast, Jason Neely, Elaine Hardcastle and Louise Heavens)

By Natalie Grover

LONDON (Reuters) -Global oil benchmark Brent hit $93 a barrel on Wednesday as the risk of escalating conflict in the Middle East threatened to disrupt oil supplies from the region, with Iran calling for an oil embargo to be imposed on Israel.

Brent crude futures was up $2.54, or 2.8%, to $92.44 a barrel at 1056 GMT. West Texas Intermediate crude (WTI) futures were up $2.54, or 2.9%, at $89.2 a barrel.

Both benchmarks gained more than $3 to touch their highest levels in two weeks earlier in the session.

Markets factored in risk premiums after hundreds of Palestinians were killed in a blast at a Gaza City hospital on Tuesday that Israeli and Palestinian officials blamed on each other.

Jordan then cancelled a summit it was to host with U.S. President Joe Biden and Egyptian and Palestinian leaders. Biden arrived in Israel on Wednesday pledging solidarity in its war against Hamas, and backing its account that the Gaza hospital blast had been caused by militants.

“This turn of diplomatic fortunes again garners fear of conflict spread and therefore the leap in oil,” said John Evans of oil broker PVM.

Elsewhere in the Saudi city of Jeddah, Iranian Foreign Minister Hossein Amirabdollahian urged members of the Organisation of Islamic Cooperation to impose an oil embargo on Israel.

OPEC+ is not planning to take any immediate action on Iran’s call, two sources from the producer group told Reuters.

“A long occupation looms as the scenario that pushes Brent oil futures above $US100/bbl because it raises the risk that the Israel Hamas conflict expands and potentially draws in Iran directly,” added Vivek Dhar, an analyst at Commonwealth Bank of Australia.

Geopolitical tensions aside, other drivers are also supporting oil prices.

U.S. crude stocks fell by a much-steeper-than-expected 4.4 million barrels in the week ended Oct. 13, compared to the forecast of a 300,000 barrel fall, according to market sources citing American Petroleum Institute figures on Tuesday. [API/S]

Official U.S. government data is due later on Wednesday.

On the demand side, China’s economy grew faster-than- expected in the third quarter, official data on Wednesday showed, suggesting a recent flurry of policy measures is helping to bolster a tentative recovery.

Data also showed that the country’s oil refinery throughput in September hit a record daily rate, up 12% from a year earlier, as refiners increased run rates to cater for strong demand for transport fuel over the Golden Week holiday and improving manufacturing activity.

But analysts sounded caution on China’s economy, with the country’s real estate sector still in peril.

“The economic recovery is still in its infancy,” Moody’s Analytics economist Harry Murphy Cruise said.

Meanwhile, higher-than-expected September U.S. retail sales spurred expectations of another interest rate hike by year-end. Interest rate hikes to curb inflation can slow economic growth and reduce oil demand.

(Reporting by Natalie Grover, Arathy Somesekhar and Muyu Xu; editing by Lincoln Feast, Jason Neely, Elaine Hardcastle)

By Natalie Grover

LONDON (Reuters) – Oil prices surged nearly 2% on Wednesday as tension escalated in the Middle East after hundreds were killed in a blast at a Gaza hospital, sparking concerns about potential oil supply disruptions from the region.

Brent crude futures was up $1.55, or 1.7%, to $91.45 a barrel at 0810 GMT. West Texas Intermediate crude (WTI) futures were up $1.66, or 1.9%, at $88.32 a barrel.

Both benchmarks gained more than $2 to touch their highest levels in two weeks earlier in the session.

Markets factored in risk premiums after hundreds of Palestinians were killed in a blast at a Gaza City hospital on Tuesday that Israeli and Palestinian officials blamed on each other.

Jordan then cancelled a summit it was to host with U.S. President Joe Biden and Egyptian and Palestinian leaders. Biden arrived in Israel on Wednesday, beginning a visit to consult on the spiralling Gaza war.

“This turn of diplomatic fortunes again garners fear of conflict spread and therefore the leap in oil,” said John Evans of oil broker PVM.

“A long occupation looms as the scenario that pushes Brent oil futures above $US100/bbl because it raises the risk that the Israel Hamas conflict expands and potentially draws in Iran directly,” added Vivek Dhar, an analyst at Commonwealth Bank of Australia.

Geopolitical tensions aside, other drivers are also supporting oil prices.

U.S. crude stocks fell by a much-steeper-than-expected 4.4 million barrels in the week ended Oct. 13, compared to the forecast of a 300,000 barrel fall, according to market sources citing American Petroleum Institute figures on Tuesday.

Official U.S. government data is due later on Wednesday.

On the demand side, China’s economy grew faster-than- expected in the third quarter, official data on Wednesday showed, suggesting a recent flurry of policy measures is helping to bolster a tentative recovery.

Data also showed that the country’s oil refinery throughput in September hit a record daily rate, up 12% from a year earlier, as refiners increased run rates to cater for strong demand for transport fuel over the Golden Week holiday and improving manufacturing activity.

But analysts sounded caution on China’s economy, with the country’s real estate sector still in peril.

“The September data likely guarantee that China will hit its ‘around 5%’ growth target this year. That said, it will struggle to better it. The economic recovery is still in its infancy,” Moody’s Analytics economist Harry Murphy Cruise said.

Meanwhile, U.S. retail sales increased more than expected in September, spurring expectations of another interest rate hike by the Federal Reserve by year-end. Interest rate hikes to curb inflation can slow economic growth and reduce oil demand.

Venezuela’s government and its political opposition on Tuesday also agreed to electoral guarantees for 2024 presidential elections, paving the way for possible U.S. sanctions relief that could eventually boost oil supplies.

(Reporting by Natalie Grover, Arathy Somesekhar and Muyu Xu; editing by Lincoln Feast and Jason Neely)

By Sarah Wu and Ben Blanchard

TAIPEI (Reuters) – Taiwan’s Foxconn, the world’s largest contract electronics maker, will build a new kind of data centre using Nvidia chips and software for a range of applications including self-driving cars, the companies said on Wednesday.

Sharing a stage at Foxconn’s annual tech showcase in Taipei, Foxconn Chairman Liu Young-way and Nvidia CEO Jensen Huang said their companies would build these “AI factories” together.

“A new type of manufacturing has emerged – the production of intelligence. And the data centres that produce it are AI factories,” Huang said, adding that Foxconn had the expertise and scale to build them globally.

Showing a hand-drawn sketch, Huang – sporting his signature black leather jacket – explained how “AI factories” could continuously receive and process data from autonomous electric vehicles to make them smarter.

“This car would of course go through life experience and collect more data. The data would go to the AI factory. The AI factory would improve the software and update the entire AI fleet,” said the Taiwan-born Huang. “In the future, every company, every industry, will have AI factories.”

Nvidia, the world’s most valuable chip company, said in a statement that the AI factories would use its chips and software, including its cutting-edge GH200 superchip that it is barred from selling in China.

The announcement comes after Nvidia on Tuesday said new U.S. export restrictions would also block sales of two less powerful high-end AI chips it created for the Chinese market along with one of its top-of-the-line gaming chips.

Nvidia’s shares have tripled in 2023, giving the company a market value of more than $1 trillion, driven by excitement over the central role of the company’s chips in AI applications.

Foxconn, the largest supplier of Apple’s iPhones, wants to replicate its level of success in assembling personal computers and smartphones as it expands into making electric vehicles for other companies.

In January, Foxconn and Nvidia announced a partnership to develop autonomous vehicle platforms, in which Foxconn would manufacture electronic control units (ECUs) for cars based on Nvidia’s DRIVE Orin chip to sell to the global market.

Liu, standing next to Huang, said Foxconn is “trying to convert itself from a manufacturing service company to a platform solution company,” citing smart cities and smart manufacturing as other applications for AI factories.

Foxconn on Wednesday unveiled a new electric cargo van called Model N, the sixth prototype in its EV push that has set ambitious goals but has so far only seen limited orders.

Jun Seki, head of Foxconn’s EV business, said the company was talking to 14 potential customers, without naming them, and sees India and Japan as promising countries for EV development.

Initially targeting 5% of the global EV market and the equivalent of $33 billion in revenue from manufacturing EVs and components by 2025, Foxconn’s aggressive longer-term ambition is to make nearly half the world’s EVs.

Foxconn’s Tech Day takes place on the birthday of its billionaire founder, Terry Gou, who stepped down as the company’s chief in 2019.

He is now running as an independent candidate for Taiwan’s president at elections in January and did not appear at the event, unlike last year when he drove on stage in a prototype EV.

Foxconn’s shares closed down 0.9% on Wednesday, compared with a 1.2% fall on the broader market.

(Reporting by Sarah Wu and Ben Blanchard; Editing by Christian Schmollinger and Jamie Freed)

(Reuters) – A strike on a Gaza hospital killed hundreds of Palestinians, deepening tensions in the Middle East and raising the stakes for U.S. President Joe Biden as he flies to Israel on Wednesday to signal support for its war against Hamas.

CONFLICT

* The blast at Al-Ahli al-Arabi hospital killed between 300 and 500 people, according to health ministry sources and a civil defence chief in Gaza. Palestinian officials said an Israeli air strike hit the hospital, while Israel blamed the blast on a failed rocket launch by the Palestinian Islamic Jihad group, which denied responsibility.

* “The entire world should know: It was barbaric terrorists in Gaza that attacked the hospital in Gaza, and not the IDF,” Israeli Prime Minister Benjamin Netanyahu said, referring to the Israel Defense Forces.

* Daoud Shehab, a spokesman for Islamic Jihad, told Reuters: “This is a lie and fabrication, it is completely incorrect. The occupation is trying to cover for the horrifying crime and massacre they committed against civilians.”

* The Israeli military urged Gaza City residents to relocate southward, saying in a new evacuation advisory there was a “humanitarian zone” with down the coast of the Palestinian enclave.

* Yossi Landav, 55, has worked in search and rescue for 33 years but nothing could prepare him for what he saw in the aftermath of a Hamas attack in southern Israel which killed at least 1,300 people.

DIPLOMACY AND PROTESTS

* Biden will pose “tough questions” and seek a sense of Israel’s plans and objectives in the days and weeks ahead in meetings with Netanyahu, the Israeli war cabinet and other Israeli leaders.

* “He’ll be asking some tough questions, he’ll be asking them as a friend, as a true friend of Israel, but he’ll be asking some questions of them,” White House spokesperson John Kirby told reporters on Air Force One during the flight to Tel Aviv.

* Jordan cancelled a summit it was to host in Amman on Wednesday with Biden and the Egyptian and Palestinian leaders to discuss Gaza, Foreign Minister Ayman Safadi said.

* The hospital blast drew condemnation across the Arab world, and protests were staged at Israel’s embassies in Turkey and Jordan and near the U.S. embassy in Lebanon, where security forces fired tear gas toward demonstrators.

* Palestinian security forces in Ramallah fired tear gas and stun grenades to disperse protesters throwing rocks and chanting against President Mahmoud Abbas as popular anger boiled over after the deadly Gaza hospital attack.

* Lebanon’s Iran-backed Hezbollah militant group denounced what it said was Israel’s deadly attack on the Al-Ahli al-Arabi hospital in Gaza, which is run by the Anglican church, and called for “a day of unprecedented anger” against Israel and Biden’s visit.

* The United Nations Security Council will now vote on Wednesday on a Brazilian-drafted resolution that calls for humanitarian pauses in the conflict between Israel and Palestinian militants Hamas to allow humanitarian aid access to the Gaza Strip.

* The U.S. State Department will continue to offer government-sponsored charter flights to Europe from Tel Aviv to help Americans leave Israel through at least Sunday.

* The U.S. State Department raised its travel alert for Lebanon to “do not travel,” citing the security situation related to rocket, missile, and artillery exchanges between Israel and Hezbollah.

* Canadian Prime Minister Justin Trudeau cited a marked rise in antisemitism in Canada after Palestinian Islamist group Hamas’ attack on Israel and Israel’s subsequent deadly air strikes in Gaza.

ANALYSIS

* Whatever unfolds in Gaza war, judgment day looms for Netanyahu

* EXPLAINER-Why Gaza’s Rafah border crossing matters, and why Egypt is keeping it shut

EXPLAINER-What you need to know about Hezbollah, the group backing Hamas against Israel

FACTBOX-US aircraft carriers – What they bring to the Middle East

(Compiled by Lincoln Feast; Edited by Gerry Doyle and Miral Fahmy)

By Arathy Somasekhar and Muyu Xu

(Reuters) – Oil prices surged on Wednesday as tension escalated in the Middle East after hundreds were killed in a blast at a Gaza hospital, sparking concerns about potential oil supply disruptions from the region.

Brent crude futures advanced $1.69, or 1.9%, to $91.59 a barrel at 0347 GMT. West Texas Intermediate crude (WTI) futures were up $1.84, or 2.1%, at $88.50 a barrel.

In earlier trade, both benchmarks gained more than $2 to touch their highest levels in two weeks.

Markets factored in risk premiums after about 500 Palestinians were killed in a blast at a Gaza City hospital on Tuesday that Israeli and Palestinian officials blamed on each other.

Jordan then cancelled a summit it was to host with U.S. President Joe Biden and Egyptian and Palestinian leaders.

“The cancellation of a summit between Biden and Arab leaders reduces the likelihood of a diplomatic solution to the Israel Hamas conflict,” Vivek Dhar, an analyst at Commonwealth Bank of Australia, said in a client note.

Markets are nervous about a threatened Israeli ground offensive in Gaza.

“A long occupation looms as the scenario that pushes Brent oil futures above $US100/bbl because it raises the risk that the Israel Hamas conflict expands and potentially draws in Iran directly,” Dhar said.

Biden is set to visit Israel on Wednesday to show support for the country in its war with Islamist militant group Hamas. The White House said he will make clear he does not want the conflict to expand.

Also supporting oil prices, U.S. crude stocks fell by about 4.4 million barrels in the week ended Oct. 13, according to market sources citing American Petroleum Institute figures on Tuesday. That was much steeper than a 300,000 barrel draw that analysts had forecast.

Official U.S. government data is due later on Wednesday.

On the demand side, China’s economy grew faster than expected in the third quarter, official data on Wednesday showed, suggesting a recent flurry of policy measures is helping to bolster a tentative recovery.

China’s official data also showed that the country’s oil refinery throughput in September hit a record daily rate, up 12% from a year earlier as refiners increased run rates to cater for strong demand for transport fuel over the Golden Week holiday and improving manufacturing.

But analysts sounded cautious on China’s economic growth as the real estate sector remains a drag.

“The September data likely guarantee that China will hit its ‘around 5%’ growth target this year. That said, it will struggle to better it. The economic recovery is still in its infancy,” Moody’s Analytics economist Harry Murphy Cruise said in a note.

Meanwhile, U.S. retail sales increased more than expected in September, spurring expectations of another interest rate hike by the Federal Reserve by year-end. Interest rate hikes to curb inflation can slow economic growth and reduce oil demand.

Venezuela’s government and its political opposition on Tuesday agreed to electoral guarantees for 2024 presidential elections, paving the way for possible U.S. sanctions relief that could eventually boost oil supplies.

(Reporting by Arathy Somesekhar and Muyu Xu; Editing by Sonali Paul)

TAIPEI (Reuters) -Taiwan’s Foxconn, the world’s largest contract manufacturer, will build artificial intelligence data factories using Nvidia chips and software to make products including self-driving cars, the companies said on Wednesday.

Sharing a stage at Foxconn’s annual Tech Day in Taipei, Foxconn Chairman Liu Young-way and Nvidia CEO Jensen Huang said their companies were building AI factories together.

Huang showed a hand-drawn sketch of what the two companies are building, which he called an “AI factory”.

“This is a factory that takes data input and produces intelligence as an output,” he said. “In the future, every company, every industry, will have AI factories.”

What Nvidia and Foxconn are building is an entire end-to-end AI system for autonomous electric vehicles, with the AI factory developing the car’s software, Huang added.

“This car would of course go through life experience and collect more data. The data would go to the AI factory, the AI factory would improve the software and update the entire AI fleet,” he said.

“This entire end-to-end system, on the one hand AI factory, on the other end EV fleet, is what Nvidia and Foxconn are building.”

(Reporting by Sarah Wu and Ben Blanchard; Editing by Christian Schmollinger and Jamie Freed)

US Tech Giants Add $2.4Trillion on AI Hype

If there was ever any doubt about artificial intelligence potential, then the $2.4 trillion US tech giants added to their market caps should quell any concerns. The focus is on generative AI; US tech giants have been on a roll, posting double-digit percentage gains in share price values owing to their innovations and solutions around the groundbreaking technology.

Artificial Intelligence Hype

Apple, Microsoft, Alphabet, and Amazon are some of the companies that have posted an average of 36% in share price gains as investors turned to them for exposure to generative AI. Nevertheless, Nvidia has been the biggest beneficiary, going by the 200% plus rally as the focus shifted to its graphics processing units used to enable AI innovations.

The chip giant has already joined the trillion-dollar club, having become a Wall Street darling on AI hype. Despite the stock appearing overvalued, investors have continued to add it to their portfolios in anticipation of further gains as the AI revolution is just starting. The company’s chips are in high demand as they power many advanced generative AI models that produce new content from the volume of training data.

The gains posted by US tech giants amid the generative AI hype have helped propel tech-heavy NASDAQ 100 to 80% of its all-time highs. It marks the fastest pence back to near-all-time high levels than t after the dot-com bust. Nevertheless, valuation concerns are becoming louder by the day as public multiples for most tech companies are back to 10 10-year Covid average of 6.1 times 12 months’ revenue.

Amid the valuation concerns, tech companies exposed to revolutionary technology continue to attract strong interest. The strong interest comes from the growing buzz about generative AI tools like OpenAI’s ChatGPT and Google’s Bard and their potential impact on the digital world.

AI Funding Deals

On the other hand, the US continues to lead the pack on artificial intelligence funding deals. OpenAI has been one of the most sought-after startups, attracting $10 billion in investment from Microsoft. Inflection is another company that has raised $1.3 billion as it continues to work on innovations tied to AI.

In Europe, France is in the driver’s seat on AI funding deals with three of the largest funding rounds. Hugging Face raised $235 million, followed by Poolside with $126 million, and Mistral AI having raised $113 million. Europe is becoming a hotbed of AI, with 40% of new unicorns all working on generative AI.

The billions of dollars raised by AI startups come on the heels of fundraising dropping significantly as investors remain wary. Companies no longer spend big on new projects or acquisitions as cost cuts remain a top priority. For instance, there were only ten transactions involving large-cap techy companies this year, considering there were 26 deals in 2022 and 27 in 2021.

Tech companies have prioritized cost cuts to navigate the high-interest rate environment and uncertainty over the economic outlook. Nevertheless, some tech companies have prioritized growth and expansion over short-term profits. Massive investments in AI innovations.

By Liangping Gao and Ryan Woo

BEIJING (Reuters) – China’s property sales and investment posted double-digit declines as efforts to support big cities failed to bolster confidence in an industry struggling to emerged from crisis, although the pace of contraction slowed.

Property sales by floor area fell 19.77% year-on-year, narrowing from a 23.95% fall in August, according to Reuters calculations based on data released on Wednesday by the National Bureau of Statistics (NBS).

In September, home sales were 64.73 million square metres lower than in September 2019, the highest in three months, showing a deepening sector correction disrupted by COVID-19 and a government crackdown on debt.

The property sector is struggling to regain its footing, with piecemeal support measures providing just a short-lived boost in tier-one cities, while the rest of the country grapples with an oversupply of homes and low confidence.

The data comes just hours ahead of a deadline for Country Garden Holdings, China’s biggest private property developer, to make a coupon payment to its bond investors or risk defaulting on its $11 billion in overseas debt, which would deepen the country’s real estate crisis.

Separate data on Wednesday showed China’s economy grew at a faster-than-expected clip in the third quarter, while domestic consumption also picked up pace last month, suggesting the recent recovery may carry enough steam to reach Beijing’s full-year growth target.

However, the prolonged debt crisis in the property sector, which accounts for nearly a quarter of economic output, has been a drag on China’s growth this year, hampering activity across a broad swathe of industries.

The International Monetary Fund downgraded its 2023 and 2024 growth forecasts for China, saying the property slowdown could cause China’s GDP to decline, according to a report released on Wednesday.

“The property weakness needs to be monitored which requires more policy support. Further relaxation of property curbs can be expected but the effects might take a bit longer time to materialise,” said Zhou Hao, Economist at Guotai Junan International.

Property investment fell 18.7% from a year earlier after a 19.1% drop in August, according to Reuters calculations.

“S&P Global Ratings expects that the low number of construction starts, an inventory overhang in lower-tier cities, and ever-tightening escrow restrictions will keep property sales depressed,” S&P’s credit analysts said in a note on Monday.

The credit rating agency expected 2024 sales to drop by another 5%.

Property sales by floor area in China fell at a faster pace in January-September compared with a year earlier, down 7.5% versus a 7.1% fall in the first eight months of 2023.

Property investment in the first nine months of 2023 fell by 9.1% from a year earlier, after slumping 8.8% in January-August, according to NBS data.

New construction starts measured by floor area fell 23.4% year-on-year, after a 24.4% drop in the first eight months.

Funds raised by China’s property developers were down 13.5% year-on-year after a 12.9% slide in January-August.

(Reporting by Liangping Gao, Ella Cao and Ryan Woo; Editing by Christian Schmollinger and Sam Holmes)

BEIJING (Reuters) -China’s economy grew at a faster-than-expected clip in the third quarter, while consumption and industrial activity in September also surprised on the upside, suggesting the recent flurry of policy measures is helping to bolster a tentative recovery.

Rapidly weakening growth in the world’s second-biggest economy since the second quarter prompted authorities to roll out support steps over the past weeks, and Wednesday’s batch of data indicated the stimulus is starting to gain traction although a property crisis and other headwinds pose risks to the outlook.

Gross domestic product (GDP) grew 4.9% in July-September from the year earlier, data released by the National Bureau of Statistics showed, versus analysts’ expectations in a Reuters poll for a 4.4% increase but slower than the 6.3% expansion in the second quarter.

On a quarter-by-quarter basis, GDP grew 1.3% in the third quarter, accelerating from a revised 0.5% in the second quarter and above the forecast for growth of 1.0%.

“It seems that all of that stimulus is finally beginning to take effect, with a broad beat from growth, retail sales, industrial production and unemployment,” said Matt Simpson, senior market analyst at City Index in Brisbane.

The economy faltered in the second quarter after a brief post-COVID recovery, dragged by a property downturn and huge debt due to a decades-long infrastructure binge.

Beijing has in recent weeks unveiled a raft of measures, including more public works spending, interest rate cuts, property easing and efforts to shore up the private sector.

The recovery momentum suggests the government’s full year 2023 growth target of around 5.0% is likely to be achieved.

“The improvement in Q3 economic data makes it less likely for the government to launch stimulus in Q4, as the growth target of 5% is set to be achieved,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management.

“The focus of the government and the market will shift to the growth outlook for next year. The key issue is what growth target the government will set and how much fiscal easing will take place.”

Industrial output in September grew a stronger than expected 4.5% from a year earlier, but the pace was unchanged from August, according to the data. Analysts had expected a 4.3% increase.

Growth of retail sales, a gauge of consumption, also beat expectations, rising 5.5% last month, and accelerating from a 4.6% increase in August. Analysts had expected retail sales to expand 4.9%.

Fixed asset investment grew 3.1% in the first nine months of 2023 from the same period a year earlier, versus expectations for a 3.2% rise. It expanded 3.2% in the January-August period.

Property investment in the first nine months of 2023 fell by 9.1% from a year earlier, after slumping 8.8% in January-August, the data showed.

(Reporting by Ellen Zhang, Joe Cash and Kevin Yao; Editing by Shri Navaratnam)