Most Asia markets up after Wall Street record, China growth stable
Wall Street, while Shanghai stocks pared steep early losses thanks to stronger than expected growth figures.HONG KONG, July 17 — Most Asian markets rose today following another record close on
The world’s number two economy expanded an annualised 6.9 per cent in April-June, beating forecasts in an AFP survey and indicating it is stabilising after a years-long slowdown.
However, while the reading was the same as the previous three months, officials warned of “uncertain factors abroad and long-term structural contradictions” at home.
China is trying to shift from an economy reliant on state investment to one powered by consumer spending. Its leaders are also attempting to clamp down on bad debt, which analysts fear could spark a financial crisis if not dealt with.
Rob Subbaraman, chief economist for Asia ex-Japan at Nomura Holdings in Singapore, told Bloomberg News that while fiscal stimulus remains an important driver of growth “it’s also encouraging to see more signs of rebalancing, with the pickup in retail sales growth.”
Shanghai stocks plunged more than two percent before the release of the GDP figures, on worries about the government’s drive to deal with the debt crisis. But they partially recovered afterwards and ended down 1.4 per cent.
Most other regional investors built on last week’s solid gains, tracking fresh highs for the Dow and S&P 500 prompted by below-par US inflation and retail sales data.
The US readings missed forecasts and fuelled speculation that the Federal Reserve’s plans to raise interest rates this year could be put on the back burner. This sent equities higher since borrowing costs look likely to remain low.
Hong Kong was up 0.3 per cent in the afternoon and Seoul closed 0.4 percent higher.
Singapore was 0.1 per cent higher while Wellington, Taipei and Manila all saw healthy rises. But Sydney ended 0.2 per cent down. Tokyo was closed for a public holiday.
Lower expectations for a rise in US interest rates rattled the dollar on Friday. While the unit was stronger it struggled to claw back its big losses against the pound, euro and yen.
The greenback was already under pressure after Fed boss Janet Yellen gave a more doveish outlook for future rises in interest rates, pointing to the bank’s struggle to fire up inflation.
“Persistently low inflation and soft retail sales in the US are raising legitimate concerns about whether the likely resting point for the Fed Fund Rate might be well below the three per cent” that is forecast for the end of 2019, said Ric Spooner, chief market analyst at CMC Markets.
In early European trade London and Frankfurt each rose 0.2 per cent, while Paris was flat. — AFP
Source: The Malay Mail Online