Asian stock markets edged down Tuesday following data showing China’s economy, the world’s second biggest and a key driver of global growth, logged its weakest performance in a quarter of a century last year.
Official figures showed gross domestic product expanded 6.9 percent, matching the government’s target of “about seven percent” and in line with a forecast in an AFP survey.
However, it was much weaker than the previous year and highlights the job facing the country’s leadership as it struggles to recalibrate the growth engine.
The sharp slowdown in China has sent shockwaves through markets from Asia to the Americas over the past six months, in a rout that has wiped trillions off valuations and fuelled fears of another global economic crisis.
The last three months registered growth of 6.8 percent year-on-year, the National Bureau of Statistics (NBS) said.
Shanghai’s stock market, which has already plunged almost 20 percent since the start of this year, rallied initially before paring the gains to sit 0.2 percent lower in characteristically volatile trade.
Hong Kong was also down 0.2 percent and Tokyo lost 0.7 percent by the break, while Seoul dipped 0.5 percent.
Beijing is trying to transform the nation’s growth model from investment and exports to one driven by domestic consumer demand.
The structural transformation was still under way, the NBS said in a statement, adding it was “a crucial period during which challenges need to be overcome and problems need to be resolved and the task of comprehensively deepening the reform is still heavy”.
– Iran pressure on oil –
James Laurenceson, deputy director of the Australia-China Relations Institute at the University of Technology in Sydney, suggested the leadership was faring well.
He told Bloomberg News that “2015 was a turning point in China’s development because it represented a clear break from the old growth model.
“With very little help from fixed-asset investment and exports, household consumption proved resilient and generated enough jobs to stave off any widespread instability.”
While the Chinese figures will have met expectations, investors remain on edge over the ongoing turmoil on oil markets, a day after Brent slumped to its lowest level below $ 28 since late 2003.
The contract edged up Tuesday but analysts warned the commodity faces further downward pressure after Iran ordered the production of half a million extra barrels a day, soon after Western sanctions were lifted.
The move will add to an already flooded market at a time when demand is weak and the global economy is teetering.
“We’ve got Iran knocking on the door with a further 500,000 barrels a day and we think they’ll easily meet that target,” David Lennox, an analyst at Fat Prophets in Sydney, told Bloomberg News.
“Nothing has really changed for the market, investors are still looking for producers to cut supply.”
Brent edged up 0.5 percent but US benchmark West Texas Intermediate was 0.3 percent lower.
The entrenched fear on trading floors weighed on higher-yielding, or riskier, currencies from emerging markets, with the South Korean won, Australian dollar and Indonesian rupiah down between 0.1 and 0.3 percent.
There were also losses for the New Zealand and Taiwan (Taiwan OTC: 6549.TWO – news) dollars.
– Key figures around 0240 GMT –
Tokyo – Nikkei 225: DOWN 0.7 percent at 16,834.13 (break)
Shanghai – Composite: DOWN 0.2 percent at 2,909.33
Hong Kong – Hang Seng: DOWN 0.2 percent at 19,209.30
Euro/dollar: UP at $ 1.0888 from $ 1.0886 Monday
Dollar/yen: DOWN at 117.35 yen from 117.36 yen
London – FTSE 100: DOWN 0.4 percent at 5,779.92 (close)
New York – Dow: Closed for a public holiday
