Asia report: Mixed day for stocks as China GDP tops forecasts

Investors in the Asia-Pacific region received a mixed bag of results on Tuesday, after positive economic data from China boosted market sentiment earlier in the session.

“Asian equity markets are trading on the back foot overnight - the subdued tone driven by ongoing investor concerns regarding the global rate and growth environment,” said TickMill market analyst Patrick Munnelly.

“Data out of China produced mixed response as GDP and retail sales numbers came in stronger than expected, however, this was countered by industrial production which came in below expectations leaving the mainland Shanghai Composite flatlining on the session, while the Hang Seng dipped into negative territory.

“The NIkkei managed to buck the negativity, as reports from the Bank of Japan suggest they will target a consumer price index level of 1.6% to 1.9%, sub the current 2%, suggesting a delayed exit from easy monetary policy.”

Stocks mixed across region after solid China data

In Japan, the Nikkei 225 rose 0.51% to 28,658.83, while the Topix increased 0.69% to 2,040.89.

Among the leaders on Tokyo’s benchmark, Chiba Bank rose by 3.38%, Terumo Corporation by 2.53%, and Nissui by 2.47%.

In China, the Shanghai Composite added 0.23% to 3,393.33, while the Shenzhen Component increased 0.04% to 11,860.40.

Guangdong Songfa Ceramics and GuangDong Super Telecom led the Shanghai bourse, both increasing by 10.03%.

In Hong Kong, the Hang Seng Index slipped 0.63% to 20,650.51, with ANTA Sports Products dropping by 7.44%, SMIC by 3.85%, and Sunny Optical Technology by 3.01%.

South Korea’s Kospi was off 0.19% to 2,571.09, with Doosan Heavy Industries & Construction and Samsung Engineering dropping by 3.42% and 3.41%, respectively.

In Australia, the S&P/ASX 200 decreased 0.29% to 7,360.20, with Sayona Mining dropping by 9.3% and Summerset Group Holdings by 3.64%.

New Zealand’s S&P/NZX 50 was 0.44% weaker at 11,884.10, with Scales Corporation and Eroad decreasing by 3.37% and 3.33%, respectively.

On the currency front, the yen was last 0.34% stronger on the dollar at JPY 134.01, as the Aussie was ahead 0.56% at AUD 1.4840.

The Kiwi advanced 0.53% on the greenback, meanwhile, to change hands at NZD 1.6092.

Oil prices were in the red, with Brent crude futures last decreasing 0.14% on ICE to $84.64 per barrel, and the NYMEX quote for West Texas Intermediate down 0.21% at $80.66.

China’s economy jumps in first quarter, Aussie policymakers considered rate hike

In economic news, China's economy grew 4.5% in the first quarter of 2023, according to Beijing’s National Bureau of Statistics.

That was well ahead of the 4% economists polled by Reuters were anticipating, and was the fastest economic expansion since the first quarter of 2022.

In the fourth quarter of last year, the Chinese economy grew 2.9%.

Elsewhere in the China data, retail sales rose 10.6% in March, also beating Reuters polling for expected growth of 7.4%.

Industrial output was ahead 3.9% in the month, however, which was slightly lower than the Reuters-set forecast for 4%.

“Chinese policymakers will see much to cheer about in the first quarter economic data, especially the vigorous rebound in household consumption and the recovery in home sales,” said Duncan Wrigley, chief China economist at Pantheon Macroeconomics.

“This means they will stick to current monetary and fiscal policy settings, monitoring the longevity of the private sector recovery.

“Worries include private sector investment, which grew only 0.6% year-on-year in the first quarter, contrasting with state-owned enterprise investment rising 10%.”

Wrigley was expecting private investment to improve gradually on the consumption rebound, Beijing’s supportive stance for tech firms, and additional funding policies for small-to-medium enterprises.

“Another issue is that the sharp turnaround in exports in March is likely to fade in the second half, given weak global demand.”

In Australia, the country’s central bank warned of further tightening in the minutes from its April meeting, released earlier.

The Reserve Bank of Australia’s board had considered raising the cash rate by 25-basis points at the meeting, but ended up pausing its hiking cycle.

Its statement said “the purpose of pausing at this meeting was to allow time to gather more information”.

“Monetary policy may need to be tightened at subsequent meetings.”

Reporting by Josh White for Sharecast.com.