The better-than-forecast reading on China’s growth follows a string of positive data indicating the economy is stabilising (STR)

Hong Kong (AFP) – Asian markets mostly rose Wednesday as data showed China’s economy grew more than expected in the first three months of the year, adding to a broadly upbeat mood on trading floors.

Beijing said the world’s number two economy and a key driver of global growth expanded 6.4 percent in January-March, the same as the previous quarter but better than forecast by analysts in an AFP poll.

The data follows a number of readings indicating stability in China, with factory activity, exports, new loans and inflation all improving — tempering concerns about a slowdown that could have a major impact on the world economy.

There were also better-than-expected increases in factory output, retail sales and investment.

Observers put the uptick down to government stimulus including huge tax cuts and measures to make it easier for banks to lend.

“Overall, this confirms that China’s economic growth is bottoming out and this momentum is likely to continue going into months ahead with (a) recent surge in credit growth and a possible agreement between the US and China on trade issues,” said Tai Hui, chief market strategist for Asia-Pacific at JP Morgan Asset Management.

“From Beijing’s perspective, this set of data should show that the policy reset in mid-2018 from de-leverage to growth support is starting to yield results.”

Shanghai rose 0.2 percent, Hong Kong was flat, Tokyo went into the break 0.3 percent higher, while Singapore gained 0.6 percent, with Wellington, Taipei and Manila all up.

The gains come after a strong run-up this year, which has been fuelled by growing optimism that China and the United States will hammer out a deal to end their long-running trade war that blighted markets at the end of 2018.

However, Sydney eased 0.2 percent and Seoul slipped 0.1 percent.

Investors had been given a positive lead by Wall Street, where investors cheered another round of healthy earnings that have raised hopes for the rest of the reporting season.

Forex traders took the opportunity to push into higher-yielding, riskier assets.

The dollar dipped against the euro and pound as well as the Australian dollar, Mexican peso and South African rand, among others.

But it was up against the Japanese yen, which is considered the safe bet in times of turmoil.

On oil markets the commodity extended Tuesday’s gains after an industry group reported a surprise decline in US stockpiles while OPEC-led output cuts and US sanctions on Iran and Venezuela kept a supply glut in check.

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: UP 0.3 percent at 22,289.32 (break)

Hong Kong – Hang Seng: FLAT at 30,123.30

Shanghai – Composite: UP 0.2 percent at 3,258.78

Pound/dollar: DOWN at $1.3049 from $1.3048 at 2100 GMT

Euro/pound: UP at 86.60 pence from 86.45 pence

Euro/dollar: UP at $1.1300 from $1.1281

Dollar/yen: UP at 112.09 yen from 112.00 yen

Oil – West Texas Intermediate: UP 46 cents at $64.51 per barrel

Oil – Brent Crude: UP 25 cents at $71.97 per barrel

New York – Dow: UP 0.3 percent at 26,452.66 (close)

London – FTSE 100: UP 0.4 percent at 7,469.92 (close) 

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.