Asian stocks snapped a six-day losing streak on Friday after China's much-anticipated second-quarter GDP growth data came in line with analyst expectations. With the growth hitting a three-year low and separate reports showing slowing retail sales and industrial production growth in the world's second-largest economy, investors speculated that Beijing will step up efforts to curb financial risks.
China's gross domestic product expanded 7.6 percent in the three months to June from a year earlier, the slowest pace since 2009 and the sixth consecutive quarter of declining growth, the National Bureau of Statistics said. Industrial production growth in the month fell slightly to 9.5 percent from 9.6 percent in May, while retail sales rose 13.7 percent in June, down from 13.8 percent in May.
Japanese shares moved in a narrow range before ending slightly higher, helped by short covering after six days of losses. The Nikkei average edged up 0.05 percent. China-sensitive stocks like Hitachi Construction Machinery, JFE Holdings and Komatsu rose about a percent each.
Shipping stocks came under selling pressure due to pessimism concerning the industry given the already gloomy economic outlook. Kawasaki Kisen fell 2.4 percent to hit a fresh 2012 low, while Mitsui OSK Lines dropped 2 percent. Dentsu plunged 7 percent after it agreed to buy U.K. media firm Aegis Group for 3.2 billion pounds in cash. Tokyo Electric Power slumped 4.8 percent to hit a fresh 2012 low after the Nikkei said that power companies have decided to support a plan to reform the country's power system.
Chinese shares edged up marginally on lingering domestic and global growth worries. The benchmark Shanghai Composite index swung between gains and losses before ending 0.02 percent higher, with banks pacing the gainers on bargain hunting following steep losses earlier this week. Hong Kong's Hang Seng index added 0.4 percent, although caution prevailed ahead of a key auction of Italian debt and earnings from U.S. banking giants JP Morgan Chase and Wells Fargo due later in the day.
Australian shares rose modestly on relief as Chinese GDP figures weren't as bad as predicted. The benchmark S&P/ASX 200 rose 0.4 percent, while the broader All Ordinaries index ended 0.3 percent higher. BHP Billiton rose 0.3 percent, reversing an early loss, while rival Rio Tinto slid 0.3 percent. Banks gained ground, with ANZ and Westpac rising about 0.8 percent each, while NAB advanced 0.6 percent and Commonwealth added half a percent.
Womenswear retailer Specialty Fashion tumbled 3.9 percent after issuing a profit warning. Origin Energy slipped marginally after it announced another cost blowout and delay to an upgrade of its gas project in Bass Strait. DuluxGroup rose 0.3 percent after the company extended its takeover bid timetable for Alesco Corporation.
Seoul shares snapped a five-day decline on institutional buying. The benchmark Kospi average climbed 1.5 percent, with blue chips rebounding from a sell-off yesterday on optimism the Chinese economy may have bottomed out. Heavyweight Samsung Electronics soared 4.4 percent and Hyundai Motor, South Korea's largest automaker, rallied 3.4 percent, while shipbuilder Hyundai Heavy Industries tumbled 3 percent on a brokerage downgrade.
In economic news, South Korea's central bank today lowered its growth outlook for the economy for the second time this year, a day after it slashed the interest rate in an attempt to shield the economy from the global slowdown. The Bank of Korea now expects the gross domestic product to rise 3 percent in 2012, slower than an April forecast of 3.5 percent. The GDP growth forecast for 2013 was also lowered to 3.5 percent from 4.2 percent.
New Zealand shares fell modestly, as slowing economic growth in China and Singapore increased uncertainties in the global economy. Singapore's economy unexpectedly contracted 1.1 percent in the second quarter, reversing a strong January-March performance, data from the Trade and Industry Ministry revealed. Manufacturing output fell due to waning global demand and was responsible for the GDP decline.
Jeweler Michael Hill lost a percent, Telecom, the largest company on the exchange, fell 1.2 percent, construction firm Fletcher Building dropped 1.8 percent and children's clothing retailer Pumpkin Patch retreated 2.3 percent. Pyne Gould closed on a flat note after the High Court appointed two independent observers to monitor the affairs of its subsidiary, Perpetual Trust.
Elsewhere, India's benchmark Sensex was last trading down 0.2 percent due to fall in heavyweight shares such as Reliance Industries and Infosys. Indonesia's Jakarta Composite index was up 0.9 percent, Malaysia's KLSE Composite edged up marginally and Singapore's Straits Times index was moving up 0.9 percent, while the Taiwan Weighted average fell 0.4 percent.
On Wall Street, stocks regained some lost ground but still ended the session in the red overnight, as downbeat corporate forecasts and concerns about the world economic growth outlook continued to weigh on the markets.
Traders, meanwhile, largely shrugged off a report from the Labor Department showing a notable drop in weekly jobless claims, as the decrease largely reflected seasonal distortions. The Dow slid 0.3 percent, the tech-heavy Nasdaq fell 0.8 percent and the S&P 500 dropped half a percent.
by RTT Staff Writer
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