Asia markets escalated after Wall St record, China growth steady

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Most Asian markets mounted on Monday, following another record close on Wall Street, while Shanghai stocks reduced steep early losses as data showed China’s economy grew more than expected in the second quarter.

Beijing said the world’s number two economy expanded 6.9 percent in April-June, beating forecasts in an AFP survey, and specifying it is stabilizing after a years-long slowdown.

However, while the reading was the same as the previous three months officials alert of “uncertain factors abroad and long-term structural contradictions” at home.

The figures come as China tries to change the economy from one driven by state investment to one powered by customer spending, while leaders are also attempting to clamp down on bad debt that analysts fear could spark a financial crisis if not dealt with.

Chief economist for Asia ex-Japan at Nomura Holdings, Rob Subbaraman in Singapore, told Bloomberg News, “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 dived more than two percent ahead of the rescued on worries about the government’s drive to deal with the debt crisis, but they recovered partially afterwards and in mid-morning trade was down 0.9 percent.

– Dollar struggles –

Most other regional investors built on last week’s solid profit as they persue the Dow and S&P 500’s fresh highs that came on the back of below-par US inflation and dispense sales.

The US readings missed predicts and fuelled conjecture the Federal Reserve’s plans to lift interest rates further this year could be put on the back burner, sending value up as borrowing costs look likely to remain low.

Hong Kong was up 0.4 percent, Seoul gained 0.3 percent and Singapore was 0.2 percent higher while Wellington, Taipei and Manila all saw healthy rises. But Sydney was marginally lower. Tokyo was closed for a public holiday.

Under expectations for a lift in US interest rates clattered the dollar on Friday and the unit brawled to rebound against the pound, euro and yen in Asia.

The greenback was already under pressure after Fed boss Janet Yellen gave a more peaceful outlook for future rises in interest rates, pointing to the bank’s struggle to fire inflation.

Chief market analyst at CMC Markets, Ric Spooner said, “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 percent” that is forecast for the end of 2019.”

– Key figures around 0230 GMT –

Hong Kong – Hang Seng: UP 0.4 percent at 26,429.69

Shanghai – Composite: DOWN 0.9 percent at 3,192.32

Tokyo – Nikkei 225: Closed for a public holiday

Euro/dollar: DOWN at $1.1464 from $1.1470 at 2100 GMT

Pound/dollar: DOWN at $1.3100 from $1.3111

Dollar/yen: UP at 112.58 yen from 112.50 yen

Oil – West Texas Intermediate: UP 15 cents at $46.69 per barrel

Oil – Brent North Sea: UP 17 cents at $49.08 per barrel

New York – DOW: UP 0.4 percent at 21,637.74 (close)

London – FTSE 100: DOWN 0.5 percent at 7,378.39 (close)

Source: AFP

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