Better Chinese data bounce Asian stocks

Better than feared Chinese second-quarter economic growth erased early losses in Asia, and boosted the Australian dollar at the beginning of a new trading week. China’s GDP cooled to 7,5 % from 7,7 % in the same quarter last year. The data were, however, better than expected and investors heaved a sigh of relief.  The Asian Pacific, MSCI-index rose 0,4 % after starting the week in negative territory. Other Asian markets were up from 0,3 – 0,9 %. Shanhai added 0,91 %.

Weaker Chinese export/import figures presented last week had global markets to shiver with good reason.   The key behind  the subdued growth and slight GDP turndown is weak exports.  But domestic demand has according to analysts kept up quite well through the second quarter. There are a downward global risk weighing in on the Chinese markets along with newly imposed stricter credit controls.  The downward risks in Chinese economy have, however, not worsened materially which the latest data confirm.

Despite the reversal Asia underperformed compared with US their  stock peers which hit record closing highs for a second session on Friday, sparked by Federal Reserve Chairman Ben Bernanke’s pledge to keep monetary easing for some time. The continuation of a loose US monetary policy weighed significantly on the USD.  The DXY index where dollar is weighed against a basket of six major currencies, fell 1,7 % last week.

The weaker dollar helped the Euro recover from last week’s low on 1.2755.  It jumped to 1.3208 and trades at 1.3072. The Chinese data helped the long declining Australian dollar  to reach  91.10 after falling below 90 US cents on Friday. Commodities with copper raised 0,4 %.  Oil prices are steady with Brent crude trading close to USD 109 a barrel. Precious metals continue the positive trend from last week with gold at USD 1291 and silver USD 20.10 an ounce.

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