Asian Shares Higher as Key China Data Meet Expectations
October 19 2016 - 12:00AM
Dow Jones News
Asian shares were broadly higher early Wednesday, tracking
overnight gains on Wall Street, while key data out of China met
market expectations.
The world's second-biggest economy expanded 6.7% in the third
quarter from a year earlier, matching growth in the previous
quarter, official data showed. The figure was also in line with a
forecast by economists polled by The Wall Street Journal.
Meanwhile, September retail sales data jumped 10.7% from a year
earlier, matching expectations, though industrial output, which
gained 6.1% from a year earlier, was below a 6.4% forecast.
The numbers show that the Chinese government's capacity control
measures are working, helping to boost prices charged by
manufacturers, said Alex Wong, director of asset management at
Ample Capital.
"In terms of pricing power, China manufacturers are in a better
position now," he said.
China's equities markets held on to gains after the data showed
the nation's economy was stable. The Shanghai Composite Index was
up 0.3%, while the Shenzhen Composite Index added 0.1%. Hong Kong's
Hang Seng Index, however, was down 0.1%, retreating after Tuesday's
1.6% gain.
Investors "don't seem too excited but they are cautious," Mr.
Wong said, ahead of a European Central Bank meeting on
Thursday.
Analysts are watching whether the ECB will continue to buy €80
billion ($88 billion) per month of mainly government bonds after
March next year, though the ECB is widely expected to leave its
policy mix unchanged for a fifth straight meeting.
China's data is crucial not only for Asia, but has wider
implications on the U.S. interest-rate policy. Data last week
showed that Chinese exports fell more steeply than expected in
September, highlighting a persistent weakness in global demand, but
some analysts are more optimistic.
"I think the Fed has become more sanguine about potential
external shocks emanating from China recently (especially since the
first quarter)," said Bill Bowler, an equity sales trader at
Forsyth Barr Asia.
Overnight, U.S. stocks rose following another batch of
better-than-expected corporate results, with the Dow Jones
Industrial Average closing up 0.4%.
Elsewhere, stronger crude oil prices boosted shares of several
Australian oil companies, with Oil Search rising 1%, and Woodside
Petroleum adding 0.4%. Those gains helped drive Australia's
S&P/ASX 200 up 0.3%.
Brent, the international crude oil benchmark, gained 48 cents to
$52.16 a barrel in Asian trade, buoyed by expectations that U.S.
crude inventories fell by 3.8 million barrels in the week ended
Oct. 14. Official data by the U.S. Energy Information
Administration will be released later Wednesday.
Meanwhile, Japan's Nikkei Stock Average was up just 0.1%, as
investors there waited for more corporate earnings to assess
trends.
Among individual stocks, electronics maker Sharp gained 9.9%
following a Nikkei report that the company expects to report its
first group operating profit in three years, totaling around 40
billion yen ($385 million), for the fiscal year ending in March
2017.
Steel trader Hanwa gained 1.6% as investors bet that strong
demand in China would support prices globally.
Pei Li, Jenny Hsu and Kosaku Narioka contributed to this
article.
Write to Kenan Machado at kenan.machado@wsj.com
(END) Dow Jones Newswires
October 18, 2016 23:45 ET (03:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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