China's economy grew 7.4 percent in the first quarter, from a year
earlier, pipping forecasts of 7.3 percent. That was welcome news to
many investors given foreboding whispers that growth would be nearer
7.0 percent following a string of soft numbers recently.
Other data for March were mixed with industrial output a shade under
estimates, but retail sales picking up.
"The GDP data is better than expected. Considering government
supportive measures that have started in early April, we expect
growth to rebound to around 7.5 percent in the second quarter," said
Lu Zhengwei, chief economist at Industrial Bank in Shanghai.
"But the problem is that the government has to resort to stimulus
repeatedly to support the economy (which) means it's having a hard
time to unleash new growth drivers."
The relief rippled through regional markets with Japan's Nikkei
adding to early gains to be up 2.2 percent. Australian stocks rose
0.4 percent, while MSCI's broadest index of Asia-Pacific shares
outside Japan edged up 0.2 percent.
The mood had already been aided by a late rally on Wall Street
thanks mainly to some solid earnings reports. The Dow rose 0.55
percent and the S&P 500 0.68 percent. The Nasdaq lagged with a 0.29
percent gain but at least stabilized after recent sharp falls.
After the closing bell, Intel Corp beat Street estimates and its
shares rose 3 percent.
Yahoo Inc jumped 10 percent thanks to strong results from Alibaba
Group Holding Ltd, the Chinese e-commerce company in which Yahoo
holds a 24 percent stake.
Another fortunate stakeholder in Alibaba is SoftBank and it jumped 8
percent on the news in Tokyo trade.
Markets face another test later when Federal Reserve Chair Janet
Yellen speaks on monetary policy and the economic recovery before
the Economic Club of New York at 1625 GMT (12.25 a.m. EDT).
Sentiment could get a lift should she offer reassurance that any
rise in interest rates will come well after the Fed finishes its
[to top of second column]
Leaning the other way was caution at the evolving situation in
Ukraine after Russia declared the country to be on the brink of
civil war as Kiev said an "anti-terrorist operation" against
pro-Moscow separatists was under way.
That took a toll on European shares on Tuesday as the FTSEurofirst
300 index fell 0.96 percent. In contrast, bonds got a safe-haven
boost with yields on German debt falling to their lowest in 11
months at 1.475 percent.
In currency markets, the majors were confined to tight orbits with
the euro little changed at $1.3812 while the dollar edged up to
The main mover was the New Zealand dollar which took a spill after
the country reported inflation at a surprisingly low 1.5 percent in
the first quarter. That prompted markets to pare back expectations
on how far and fast interest rates might rise there.
The kiwi fell to its lowest in over a week at $0.8577, and dragged
down its Australian cousin to $0.9350.
In commodities, gold tumbled about 2 percent on Tuesday on heavy
stop-loss orders placed by momentum traders as prices broke below
the key 200-day moving average.
On Wednesday the metal was pinned at $1,297.90 an ounce, well off
Monday's peak at $1,330.90.
Benchmark Brent oil dipped 26 cents to $109.10 on developments in
Ukraine, while U.S. crude futures were up 6 cents at $103.81.
(Editing by Shri Navaratnam)
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