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By Naomi Rovnick and Wayne Cole SYDNEY (Reuters) -World stock markets rose on Monday, as traders placed bets on Japanese stimulus and cheered data suggesting China's economy was withstanding a U.S. trade war. Japan's Nikkei jumped 2.8% to a record peak on news the Liberal Democratic Party and the Japan Innovation Party have agreed to form a coalition government, setting the stage for Sanae Takaichi, who is viewed as pro-stimulus, to become prime minister. Europe's Stoxx 600 share index bounced 0.7% higher in early trade and Wall Street stock futures implied the blue chip S&P 500 shared index would open about 0.4% higher and the tech-heavy Nasdaq 100 would add 0.5%. It was a sign that markets were setting aside renewed jitters about U.S. regional banks for now. CHINESE ECONOMY BEATS FORECASTS Data earlier in the session showed China's economy grew 1.1% in the third quarter, to top forecasts, while industrial output also beat with a rise of 6.5%, helping to allay fears about world growth as Beijing and Washington haggle over trade. Investors were also keeping faith with high-flying artificial intelligence stocks as the Wall Street earnings season gathers momentum, with much riding on the AI titans' continuing to show blockbuster profit growth. "I wouldn't say it's early innings for big tech but I think there's still enough scope for healthy returns," said Arbuthnot Latham global investment strategy director Jason da Silva, adding he was not selling out of the AI theme yet. HIGH EXPECTATIONS FOR EARNINGS According to LSEG IBES data, analysts have forecast 8.8% year-on-year growth for S&P 500 companies overall for this quarter. BofA analyst Savita Subramanian expects 11% growth for tech earnings and chipmaker Nvidia alone to drive a quarter of the aggregate uplift in earnings per share, although the stock has drifted lower this month as cautious investors cut some exposure. "Nvidia is a great company, we have it, we're investing in it, there's no question that it's not the number one stock in the world," Carmignac investment committee member Kevin Thozet said. He cautioned that there were signs of froth in other AI stocks that were loss-making or valued at extremely high multiples of expected earnings, but said it was too early to exit the AI trade. Earnings reports in upcoming days that could also influence market sentiment include those from Tesla and Netflix, while consumer groups Procter & Gamble and Coca-Cola might provide a snapshot of how the U.S economy is coping with tariffs so far. RATE CUT BETS STRONG Signs of a weakening U.S. labour market have kept traders anticipating more rate cuts from the U.S. Federal Reserve, despite economists forecasting inflation will stick stubbornly above the central bank's average 2% target. Figures due on Friday are expected to show core U.S. price growth held at 3.1% in September but, with Fed Chair Jay Powell not pushing back against market bets, futures are fully pricing a quarter-point cut this month and another in December, with U.S. rates declining to 3% next year. That theme continued supporting U.S. Treasuries on Monday, despite the continuing government shutdown in Washington that the White House has said would cost the economy about $15 billion a week. The 10-year Treasury yield, which sets the tone for global corporate and household debt costs, fell by almost 4 basis points last week and was trading at about 4.02%. The Fed cut theme has also helped to further depress the U.S. dollar against European and higher-yielding currencies, with the euro edging up to $1.1662 on Monday after withstanding pressure from last week's surprise credit downgrade of France by ratings agency Standard & Poor's. The greenback at least held its own against the Japanese yen on Monday, as traders reduced the likely odds of a Bank of Japan rate hike this month to just over 20% and viewed the central bank as likely to support government stimulus efforts over battling inflation.    In commodities, safe-haven gold remained about the only major asset signalling any uncertainty about world growth or geopolitics, holding at about $4,266% an ounce after climbing 6% last week. Amundi Investment Institute head of cross-asset strategy Lorenzo Portelli said he was eyeing a $5,000 per ounce target for gold as central banks kept adding to reserves and the dollar's supremacy faded. Oil was weighed down on Monday by OPEC+ supply plans and international benchmark Brent crude eased 0.4% to $61.02 a barrel. (Reporting by Naomi Rovnick in London and Wayne Cole in Sydney; Editing by Kim Coghill and Alex Richardson)

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By Kevin Yao and Ellen Zhang BEIJING (Reuters) -China's economic growth slowed to the weakest pace in a year in the third quarter as fragile domestic demand left it heavily reliant on the humming of its exporting factories, stoking concerns about deepening structural imbalances. While the 4.8% growth rate met expectations and kept China on track to reach its target of roughly 5% this year, the economy's dependence on external demand at a time of mounting trade tensions with Washington raises questions over whether that pace can be sustained. Beijing may be using the headline resilience in growth as a show of strength in talks between its vice premier He Lifeng and Treasury Secretary Scott Bessent in Malaysia in coming days and a potential meeting between presidents Donald Trump and Xi Jinping in South Korea later. Still, that export strength belies weakness on home turf, where lacklustre demand gives manufacturers no choice but to fight price wars in foreign markets, and compromise on their profitability. Jeremy Fang, a sales officer at a Chinese aluminium products maker, says his firm lost 20% of revenue as higher sales in Latin America, Africa, Southeast Asia, Turkey and the Middle East failed to fully offset an 80%-90% order plunge in the U.S.    Fang said he is learning Spanish to get ahead of his Chinese competitors rushing to non-U.S. markets and is now travelling abroad twice more often than he did last year.    But that extra effort isn’t enough.    "You have to be ruthlessly competitive on price," Fang said. "If your price is $100 and the customer starts bargaining, it's better to drop $10-$20 and take the order. You can't hesitate." This intense competition among Chinese exporters feeds further weakness at home, with many having to cut wages and even jobs to stay in the race. While industrial output grew to a three-month high of 6.5% year-on-year in September, beating forecasts, retail sales slowed to a 10-month low of 3.0%. Further hitting consumers by making them feel less wealthy, data also showed new home prices falling at their fastest pace in 11 months in September. Investment in the crisis-hit property sector fell 13.9% year-on-year in the first three quarters. "China’s growth is becoming increasingly dependent on exports, which are offsetting a slowdown in domestic demand," said Capital Economics analyst Julian Evans-Pritchard. "This pattern of development is not sustainable, and so growth is at risk of slowing further over the medium-term unless the authorities take much more proactive steps to support consumer spending." CHINA'S FIVE-YEAR PLAN IN FOCUS Such calls for structural measures that make China's economy more reliant on household consumption have grown louder ahead of this week's key Communist Party meeting, where its elites will discuss the country's next five-year development plan. But while the meeting is likely to result in pledges to boost domestic demand, it will also emphasise breaking through technological frontiers and upgrading the country's sprawling industrial complex as a national security priority. This could keep the flow of economic resources tilted primarily towards manufacturers at the expense of households. A change in its growth model would make China a bigger contributor to global demand and might help tone down trade tensions. But there is no sign that Beijing is willing to relent on the industrial front as competition with the U.S. intensifies. So far, it has been successful in diversifying away from U.S. markets. Its U.S. export sales were down 27% year-on-year last month, but shipments to the European Union, Southeast Asia and Africa grew by 14%, 15.6% and 56.4%, respectively. And China is using its near-monopoly position in the production of rare earths as leverage to try to extract more concessions from Washington. This prompted renewed threats from Trump to add another 100 percentage points to tariffs on imports from China, but also messages from Washington that the two sides are willing to lower the temperature. Triple-digit tariffs would effectively place a painful trade embargo on the world's two largest economies, but Beijing might feel it can bear the pain for longer. "Relatively speaking, China is in a better position than the U.S.," said Yuan Yuwei, hedge fund manager at Water Wisdom Asset Management. "At worst, ordinary people may tighten their belts and some workers are left idle. But in the U.S., if you cut 10-20% of worker's salary, people go out into the street to protest. China can suffer for longer than the U.S." MORE STIMULUS? Overall, the economy grew 5.2% year-on-year in January-September. If policymakers feel the economy is veering off target in the fourth quarter, one option is to speed up infrastructure investment given that they are currently frontloading 2026 debt issuance. After all, fixed-asset investment shrank 0.5% in January-September from a year earlier, suggesting room for improvement in that area. Some analysts believe Beijing doesn't need more stimulus measures this year. But others still see a strong case to offer support to underperforming sectors. "With China on track to hit this year's growth target, we could see less policy urgency," said Lynn Song, chief economist, Greater China at ING. "But weak confidence translating to soft consumption, investment, and a worsening property price downturn still need to be addressed." (Reporting by Ellen Zhang and Kevin Yao in Beijing; Additional reporting by Samuel Shen in Shanghai; writing by Kevin Yao and Marius ZahariaEditing by Shri Navaratnam)

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(Reuters) -Amazon said on Monday its cloud services unit AWS was hit by an outage, disrupting several popular websites and apps across the world including Snapchat and Robinhood. "We can confirm increased error rates and latencies for multiple AWS Services in the US-EAST-1 Region," AWS said in an update on its status page. AI startup Perplexity and cryptocurrency exchange Coinbase attributed the outages to AWS. "Perplexity is down right now. The root cause is an AWS issue. We’re working on resolving it," Perplexity CEO Aravind Srinivas said in a post on X. AWS and Amazon did not respond to a request for comment. Amazon.com, PrimeVideo and Alexa were all facing issues, according to Downdetector. Paypal's Venmo was also facing issues. (Reporting by Shubham Kalia in Bengaluru; Editing by Saumyadeb Chakrabarty)

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By Tassilo Hummel and Dominique Patton PARIS (Reuters) -Gucci owner Kering said on Sunday it has agreed to sell its beauty business to L'Oreal for 4 billion euros ($4.66 billion), in a major shift in strategy by new CEO Luca de Meo as he moves to tackle the luxury group's high debt and refocus on its core fashion business. Under the deal, French beauty giant L'Oreal will acquire Kering's fragrance line Creed, as well as rights to develop fragrance and beauty products under Kering's fashion labels Gucci, Bottega Veneta and Balenciaga under a 50-year exclusive license. The licence for Gucci fragrances is currently held by Coty and the new 50-year deal with L'Oreal will commence when that expires, believed by analysts to be in 2028. The sale is a significant step towards reducing Kering's net debt, which stood at 9.5 billion euros at the end of June, on top of 6 billion euros in long-term lease liabilities, sparking investor concern.  It is also a major shift in direction by De Meo less than two months after taking the helm, as he unwinds one of the biggest strategic pivots made by his predecessor Francois-Henri Pinault, whose family controls the group, in recent years. Kering set up its beauty business in 2023 after acquiring perfume maker Creed for 3.5 billion euros in an effort to diversify and reduce its reliance on its Gucci brand, which accounts for most of its profits. But the group has struggled to ramp up the business, posting a 60 million euro operating loss for the first half of the year. The company is also battling declining growth at its largest brand Gucci, which was hit hard by slowing demand in the key Chinese market. Gucci's revenue plummeted 25% year-on-year in the last reported quarter, increasing the pressure on Kering to deleverage to avoid further credit downgrades.  "We believe selling Kering Beauté at around the same price paid for Creed two years ago is bitter but necessary medicine," said analysts at Bernstein.  A move back to beauty licensing would be "less capital intensive, less operationally geared, and arguably higher margin", said analysts at RBC, ahead of the deal, even if it has to share revenues with L'Oreal. "We also believe it indicates a strategic re-focus towards its core competencies in soft luxury and any beauty divestment may free up investment headroom towards these priorities, " they wrote in a note to investors. De Meo, who took over as CEO in September, had told shareholders he planned to take some difficult decisions to reduce debt at the group, including rationalising and reorganising where necessary. The company has also postponed a plan to fully acquire Italian fashion brand Valentino, and is aiming to sell stakes in its real estate to raise cash.  L'Oreal, the world's biggest dedicated cosmetics and beauty player, already produces blockbuster perfumes under the Yves Saint Laurent label after acquiring rights to the brand from Kering for 1.15 billion euros in 2008. The two companies also said they were setting up a joint venture to provide experiences and services for luxury clients.  The deal for Kering beauty will be L'Oreal's largest to date, bigger than its purchase of Australian brand Aesop for $2.5 billion in 2023. It is expected to close in the first half of 2026.  "L’Oreal enjoys strong momentum in the Luxe division and they must be looking forward to getting hold of the perfume and beauty licences associated with Kering’s prestigious yet relatively underdeveloped brands," said Bruno-Roland Bernard, a consultant and adjunct professor for corporate finance and luxury management at Paris-based Institut Francais de la Mode.  "It’s also possible they are taking advantage of a favourable bargaining position – with limited competition: who has the credentials and the firepower to deal with a Kering under time pressure?" L'Oreal, which has said there were "plenty" of acquisitions being looked at this year, has also been approached by representatives of Armani Group, Reuters reported this month, after the beauty conglomerate was named in the will of late designer Giorgio Armani as one of the preferred buyers for a minority stake in his fashion house. ($1 = 0.8576 euros) (Reporting by Dominique Patton and Tassilo Hummel in Paris, Anusha Shah in Bengaluru; Editing by Edmund Klamann, Diane Craft and Lincoln Feast.)

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By Kevin Buckland TOKYO (Reuters) -The Australian dollar rose on Monday, cheered by reasons to be a bit more upbeat on top trade partner China, with data showing its economy reasonably resilient to U.S. tariffs and President Donald Trump toning down some of his trade rhetoric. The yen initially weakened as Sanae Takaichi, an advocate of fiscal and monetary stimulus, appeared all but certain to become Japan's next prime minister after securing crucial political backing for the top job. However, those declines evaporated after hawkish Bank of Japan policymaker Hajime Takata reiterated a call to raise interest rates. Official data on Monday showed China's economy grew 1.1% in the third quarter, to top forecasts, while industrial output also beat with a rise of 6.5%. Although the 4.8% annual growth rate marked the weakest pace in a year, it kept the country on track to meet its official growth target of around 5%. "Judging by the figures for the first three quarters, (growth) is going to hit the target, suggesting China can withstand any pressure from the U.S.," said Dan Wang, China director at Eurasia Group. "Beijing is sending the signal that it is capable of reaching its development goals and is strongly committed to its policies." Meanwhile, President Trump said his proposed, retaliatory 100% tariff on goods from China would be "not sustainable", and confirmed he would still meet with Chinese President Xi Jinping in two weeks. The Aussie gained 0.3% to $0.6504 on Monday. China's yuan was little changed in offshore trading at 7.1235 per U.S. dollar. The euro appreciated 0.1% to $1.1665, while sterling edged down 0.1% to $1.3431. "There's an element – to use the Cold War language – of mutually assured destruction when it comes to total rare earth exports curbs and 100% tariff rates, with both the U.S. and Chinese more or less acknowledging that," said Kyle Rodda, a markets analyst at Capital.com. "As a result, the markets are pricing in that things will de-escalate," Rodda added. "However, the markets are likely to remain jittery until such backdowns are explicitly announced." In Japan, investors returned to the so-called "Takaichi trade" – bullish equities and bearish the yen – after the ruling Liberal Democratic Party sealed an alliance with the Japan Innovation Party. That sets up LDP leader Takaichi to be confirmed as prime minister in a parliamentary vote on Tuesday. Takaichi's bid to become Japan's first female premier had been in jeopardy after a sudden break-up with the LDP's coalition partner of 26 years, Komeito, earlier this month. However, in the right-wing JIP, Takaichi has a partner more aligned with her policy views. That saw the U.S. dollar appreciate as much as 0.4% to 151.20 yen early in the session, but those gains fizzled as BOJ board member Takata, who was among two officials that unsuccessfully voted for a rate hike last month, said that Japan has probably already met the central bank's 2% inflation target. Japan's benchmark Nikkei stock index was undeterred, closing more than 3% higher and hitting an all-time peak. [.T] The BOJ next decides policy on October 30, with market-implied odds of a quarter-point rate increase at 23%, according to LSEG data. (Reporting by Kevin Buckland; Editing by Sam Holmes)

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