Asia report: Markets mixed after slew of Chinese data

(Sharecast News) - Asia-Pacific markets delivered a mixed performance on Friday, as investors digested encouraging economic data from China. The Chinese economy grew at a faster-than-expected pace in the fourth quarter, with retail sales also surpassing analyst forecasts. Despite this, sentiment remained uneven across the region.

"The dollar strengthened overnight as the MSCI Asia Pacific Index ended its three-day winning streak as investors paid little attention to China's report of its fastest economic growth in six quarters," said TickMill's Patrick Munnelly.

"Following the announcement, China's benchmark CSI 300 Index fluctuated but ultimately closed higher in the afternoon session; stocks in South Korea, India, Australia, and Japan fell.

"Despite the dollar appreciating against all Group of 10 currencies, it remained on track for its first weekly decline since November."

Munnelly noted that China's economy met the government's growth target last year, supported by a last-minute stimulus package and an export surge.

"However, new US tariffs threaten a significant growth pillar moving forward.

"Asian markets fell despite being on course for weekly gains, with earlier increases driven by expectations of the Federal Reserve cutting interest rates sooner than expected.

"Japanese stocks are facing challenges, impacted by the yen's rise past 155 per dollar for the first time in nearly a month, as traders increase their expectations for a Bank of Japan rate hike next week."

Markets mixed after China data dump

In Japan, the Nikkei 225 slipped 0.31% to 38,451.46, weighed down by significant losses in DeNA, Tokyo Tatemono, and Nintendo, which declined 7.23%, 6.15%, and 4.26% respectively.

The broader Topix index fell 0.33% to 2,679.42.

Chinese markets saw modest gains - the Shanghai Composite edged up 0.18% to 3,241.82, buoyed by double-digit gains in Espressif Systems Shanghai, Everbright Jiabao, and Zhejiang Tuna Environmental Science & Technology.

The Shenzhen Component outperformed, rising 0.6% to 10,161.32.

Hong Kong's Hang Seng Index added 0.31%, closing at 19,584.06.

Semiconductor Manufacturing International Corporation surged 9.58%, while China Hongqiao Group and JD.com rose 5.14% and 4.71% respectively.

South Korea's Kospi 100 slipped 0.19% to 2,526.94, with KakaoPay, Hyundai Motor, and LIG Nex1 Co among the weakest performers, falling 4.99%, 3.42%, and 3.4% respectively.

In Australia, the S&P/ASX 200 declined 0.2% to 8,310.40, weighed down by energy and real estate stocks.

Contact Energy dropped 7%, while Meridian Energy and REA Group fell 2.96% and 2.71% respectively.

New Zealand's S&P/NZX 50 stood out with a 1% gain to close at 13,130.43.

Air New Zealand, Kiwi Property Group, and A2 Milk Company posted strong gains, rising 3.33%, 3.28%, and 3.17% respectively.

In currency markets, the dollar was last up 0.39% on the yen to trade at JPY 155.77, while it climbed 0.09% against the Aussie to AUD 1.6110, and advanced 0.16% on the Kiwi, changing hands at NZD 1.7863.

Oil prices were relatively stable, with Brent crude futures last up 0.05% on ICE to $81.33 per barrel, the NYMEX quote for West Texas Intermediate rising 0.24% to $78.87.

Chinese economic growth meets government targets for 2024

On the data front, China's economy grew by 5.4% in the fourth quarter of 2024, surpassing market expectations of 5.0%, as government stimulus measures bolstered economic activity.

The robust end to the year helped the country achieve its annual growth target of "around 5%", with full-year GDP rising 5.0%, according to the National Bureau of Statistics.

Fourth-quarter growth saw an acceleration from 4.6% in the prior quarter, and demonstrated a recovery from sluggish domestic demand earlier in the year.

However, the 2024 performance was slower than the 5.4% growth recorded in 2023, as real estate challenges and weak household consumption continued to weigh on the economy.

Retail sales in December rose 3.7% year-on-year, beating forecasts of 3.5%, while industrial output surged 6.2%, outperforming expectations of 5.4%.

The figures highlighted a production-led recovery, although weaker-than-expected fixed asset investment, which grew 3.2% for the year, underscored lingering structural challenges.

Real estate investment dropped 10.6% in 2024, deepening from earlier declines and reflecting the ongoing struggles of China's property sector.

Urban unemployment ticked up to 5.1% in December from 5.0% the previous month, pointing to a softer labour market.

Meanwhile, disposable income for urban residents grew by 4.4% in 2024, lagging behind the overall economy, while rural disposable income rose 6.3%.

Reporting by Josh White for Sharecast.com.