HONG KONG: Asian markets failed Tuesday to hold on to early gains following news that China’s economy grew more than expected in the first three months, with trade and geopolitical tensions still dogging sentiment.
Hong Kong and China turned negative after fluctuating through the morning on data showing the world’s number two economy expanded in January-March at the same rate as the previous three months.
The 6.8 percent reading was slightly more than tipped in an AFP survey and came despite a brewing trade dispute with the United States, a drive to address the country’s troubling debt mountain and a war on pollution that saw factory production cut.
Hong Kong fell 0.4 percent in the afternoon and Shanghai finished down 1.4 percent. Sydney, where a number of firms that rely on Chinese business are based, was flat, but Singapore added 0.2 percent.
Tokyo closed slightly higher while Seoul eased 0.2 percent, Wellington dipped 0.7 percent and Taipei fell more than one percent.
“The economic performance continued to improve and the economy was off to a good start,” said National Statistics Bureau spokesman Xing Zhihong.
However, Xia Le, chief Asia economist at Banco Bilbao Vizcaya Argentaria SA in Hong Kong, said ahead of the release that “growth headwinds remain in place, mainly from domestic policy tightening and trade skirmishes from the US. Growth is most likely to moderate through the year”.
– Investors ‘on guard’ –
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The news provided support to equities after Monday’s sell-off sparked by a US-led attack on alleged chemical weapons facilities in Syria — in response to what the Western allies say was a toxic gas attack by the Russia-backed regime.
US markets ended higher Monday on relief that the strikes did not escalate despite Russian warnings.
However, dealers are keeping a close watch on events, while the trade row with China remains in focus after the Wall Street Journal reported the US is considering measures over Beijing’s restrictions on tech devices.
That came just after Washington banned exports of sensitive technology to Chinese giant ZTE for seven years over the way it handled a probe into the illegal sale of goods to Iran and North Korea.
ZTE halted trading of its shares in Hong Kong and Shenzhen following the announcement, saying in a statement on its website it was “assessing the possible impact of the incident”.
“Global capital markets stayed in a positive mood overnight, but investors remain on guard for any escalations in geopolitical tensions while trade tariffs remain bubbling under the surface,” said Stephen Innes, head of Asia-Pacific trading at OANDA.
Oil prices bounced back slightly from Monday’s losses that were fuelled by easing concerns over Syria.
Traders are awaiting the release of US commercial crude inventories this week by the industry group American Petroleum Institute and the official Energy Information Administration.
In early European trade London rose 0.2 percent, Paris added 0.3 percent and Frankfurt gained 0.4 percent.
– Key figures around 0730 GMT –
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Tokyo – Nikkei 225: UP 0.1 percent at 21,847.59 (close)
Hong Kong – Hang Seng: DOWN 0.4 percent at 30,210.04
Shanghai – Composite: DOWN 1.4 percent at 3,066.80 (close)
London – FTSE 100: UP 0.2 percent at 7,210.26
Euro/dollar: UP at $1.2400 from $1.2380 at 2100 GMT
Dollar/yen: DOWN at 106.95 yen from 107.11
Pound/dollar: UP at $1.4365 from $1.4341
Oil – West Texas Intermediate: UP 31 cents at $66.53 per barrel
Oil – Brent North Sea: UP 26 cents at $71.68 per barrel
New York – Dow: UP 0.9 percent at 24,573.04 (close)
Source: Brecorder
