Asian share markets relieved as China data point to recovery; dollar surges

Investors were hoping for better news from China and were not disappointed with first-quarter economic growth pipping forecast at 6.4 percent.

Reuters April 17, 2019 10:25:45 IST
Asian share markets relieved as China data point to recovery; dollar surges
  • Investors were hoping for better news from China and were not disappointed with first-quarter economic growth pipping forecast at 6.4 percent

  • Industrial output surged 8.5 percent in March from a year earlier, blowing away forecasts of a 5.9 percent increase

  • MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.2 percent to near its highest since July

Sydney: Asian share markets swung higher on Wednesday as a raft of Chinese data easily beat expectations in a sign Beijing’s policy stimulus may finally be gaining traction in the world’s second-largest economy.

Investors were hoping for better news from China and were not disappointed with first-quarter economic growth pipping forecast at 6.4 percent.

More importantly industrial output surged 8.5 percent in March from a year earlier, blowing away forecasts of a 5.9 percent increase. Retail sales also pleased with a rise of 8.7 percent.

Investors reacted immediately by buying the Australian dollar, often a liquid proxy for China plays, which pushed up 0.3 percent to a two-month top at $0.7206.

Japan’s Nikkei added 0.5 percent to reach its highest in almost five months, while E-Mini futures for the S&P 500 rose 0.2 percent.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.2 percent to near its highest since July.

“This suggests that policy measures introduced by Chinese officials last year are now bearing fruit,” said Rodrigo Catril, a senior forex strategist at National Australia Bank. We had positive surprises on credit data and housing data last week and now GDP has come in better than expectations, which is building the case that a recovery is on the way,” he added. “We see the revival of the Chinese economy as a necessary condition for an improvement in global growth outlook.”

Asian share markets relieved as China data point to recovery dollar surges

Representational image. Reuters

In currency markets, the dollar finally managed to top resistance on the yen at 112.13 to reach its highest since December at 112.16. It was last at 112.02.

The dollar was flat on a basket of currencies at 96.991, still within the 95.00 to 97.70 range that has held for the past six months.

The euro edged up a touch to $1.1298, having slipped form $1.1314 overnight on a Reuters report that several European Central Bank policymakers think the bank’s economic projections are too optimistic.

One currency on the move was the New Zealand dollar which sank as far as $0.6668 after annual consumer price inflation came in well below expectations at just 1.5 percent for the first quarter.

Yields on two-year bonds dived 9 basis points to 1.48 percent as investors wagered the Reserve Bank of New Zealand (RBNZ) would have to cut rates in response.

The improved Chinese data later gave it a helping hand back up to $0.6723.

Updated Date:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

With 3.2% expansion in Q1, China becomes first major economy to return to growth since beginning of pandemic
World

With 3.2% expansion in Q1, China becomes first major economy to return to growth since beginning of pandemic

Chinese exporters have benefited from the economy’s relatively early reopening and global demand for medical supplies, according to a National Bureau of Statistics report

Indian economy may contract by 10.3% in 2020, to bounce back with 8.8% growth in 2021, says IMF
Business

Indian economy may contract by 10.3% in 2020, to bounce back with 8.8% growth in 2021, says IMF

Revisions to the growth forecast are particularly large for India, where GDP contracted much more severely than expected in the second quarter

'Solid achievement of BJP's hate-filled cultural nationalism': Rahul Gandhi slams Centre over IMF data
Politics

'Solid achievement of BJP's hate-filled cultural nationalism': Rahul Gandhi slams Centre over IMF data

Rahul shared a graph which showed Bangladesh closing in on India and almost catching up with it in terms of per capita GDP this year