Asian stocks are struggling, even as China’s growth tops expectations

Hong Kong, China (AFP) – Asian stocks mostly fell on Tuesday but pared early losses after data showed that China’s economy grew more than expected last year, while traders remained optimistic about the country’s future after years of crackdowns. debilitating coronavirus.

Traders will closely follow the Bank of Japan’s upcoming policy decision after it announced a surprise adjustment last month (AFP)

The 3 percent expansion was the slowest in four decades — barring the pandemic-stricken 2020 — and fell sharply from the previous year, as widespread lockdowns and other containment policies hurt business.

However, it beat expectations by 2.7 percent and the fourth quarter reading also beat estimates, while a healthy retail sales read provided further cheer.

There is now growing optimism that the reopening that began last month will fuel a strong recovery this year and help prop up the global economy as central banks try to avoid a recession caused by high inflation and high interest rates.

“Looking ahead, we expect to see a sustained economic recovery in 2023 as a result of reopening and policy stimulus,” said Chuping Zhu, of JPMorgan Asset Management.

“Services sectors should be the primary beneficiaries when pent-up demand is released.”

However, regional markets struggled to sustain the strong momentum that characterized trading at the start of the year, which was bolstered by Chinese hopes and signs that the battle against inflation appears to be shifting in favor of central banks.

Hong Kong, Shanghai, Sydney, Seoul, Singapore, Taipei and Manila were in the negative territory, although there were gains in Tokyo, Wellington and Jakarta.

Wall Street was closed Monday for a public holiday.

Analysts remain optimistic.

“We are in an early stage of recovery in terms of asset prices,” said Paras Anand of Artemis Investment Management.

“The recovery or normalization of the Chinese economy will be positive for the global margin growth.”

Traders now await a major monetary policy decision by the Bank of Japan on Wednesday, which comes after it surprised markets last month by announcing a shift away from its ultra-loose monetary policy, which sent the yen higher.

The bank has kept control of bond yields for years in an effort to spur economic growth, but has come under pressure in recent months as other countries have raised interest rates to fight inflation, pushing the yen to its lowest in several decades.

Speculation is now circulating that it will amend the policy or indicate that another amendment is in the pipeline.

“It would be a real market surprise if the BoJ left policy unchanged or gave up yield curve control altogether,” IG Australia’s Tony Sycamore wrote in a note.

There will also be a focus on speeches by chief financial officers at the annual Davos summit in Switzerland this week.

Wall Street giants including Goldman Sachs, Morgan Stanley and Netflix are all set to release earnings, which could give insight into how businesses deal with the effects of higher prices.

– Key figures at around 0230 GMT –
Tokyo – Nikkei 225: up 1.2 percent, to 26,140.51 (break)

Hong Kong – Hang Seng Index: down 1.0 percent at 21,533.19

Shanghai – Composite: decreased by 0.3 percent, at 3,220.17

EUR/USD: down to $1.0811 from $1.0824 on Monday

Dollar/yen: rose to 128.95 yen from 128.55 yen

Pound/dollar: down to $1.2181 from $1.2204

Euro/pound: rose to 88.75 pence from 88.66 pence

West Texas Intermediate: down 1.1% at $79.00 a barrel

Brent North Sea crude: down 0.1 percent, to $84.40 a barrel

New York – Dow: Closed for public holidays

London – FTSE 100: up 0.2 percent, at 7,860.07 (closing)

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