AFP, HONG KONG:  Shanghai stocks jumped yesterday after China’s economy enjoyed its first growth pick-up in two years, but traders in most other Asian markets were subdued ahead of Donald Trump’s inauguration. After a tepid start to the day, mainland Chinese traders rallied after official figures showed growth came in at 6.8 per cent in the final quarter of last year, the first improvement since the end of 2014.
For the year, the world’s top economy expanded 6.7 percent, in line with projections in an AFP poll and meeting government targets. However, it did mark the slowest rate since 1990.
There was also a note of caution as Trump heads to the White House, having spent most of his election campaign digging at China over what he considers
unfair trade practices and his accusations of currency manipulation.
“China’s economy was within a proper range with improved quality and efficiency. However, we should also be aware that the domestic and external conditions are still complicated and severe,” the National Bureau of Statistics said in a statement.
Shanghai ended the day 0.7 per cent higher, although Hong Kong closed down
0.7 per cent. In other markets, Tokyo ended up 0.3 per cent despite fresh weakness in the dollar against the yen and another hefty plunge in car airbag maker Takata.
The firm shifted 21 per cent, a day after losing 17 per cent, on fears of a drawn-out bankruptcy restructuring following the biggest-ever auto safety recall. Sydney shed 0.7 per cent, Seoul lost 0.4 per cent and Wellington gave up 0.2 per cent.
In early European trade London was flat while Frankfurt fell 0.2 per cent
and Paris slipped 0.1 per cent.
Dollar struggles
After a two-month rally following Trump’s election win, uncertainty has gripped trading floors in recent weeks as they try to gauge what sort of president he will be in the wake of a series of outbursts against China and global trade deals.
While he promised a big-spending, tax-cutting drive to fuel the world’s top economy, the tycoon has failed to provide any detail, leading to worries about his ability
to deliver.
But analysts said investors were keeping their powder dry until the new president provides something concrete.
“It’s clear that investors have reached a level where they are prepared to wait and see what the Trump administration has to offer,” Ric Spooner, chief market analyst at CMC Markets Asia Pacific in Sydney, told Bloomberg News.
The dollar was down against its major peers after Federal Reserve boss Janet Yellen indicated the central bank would take a wait-and-see approach to monetary policy, suggesting any rate hikes this year could be slow.
The dollar has soared since November on bets Trump’s fiscal policies would fan inflation and force the Fed to tighten borrowing costs. And remarks from Yellen Wednesday suggested this would be the case.
However, on Thursday
she said the Fed was
keeping pace with economic growth and ready to act accordingly.
“Offsetting (Wednesday’s) hawkish delivery, Dr Yellen has tossed a monkey wrench into the equation by inferring the Fed is not behind the curve, indeed much more dovish than yesterday’s speech,” Stephen Innes, senior trader at OANDA, said in a note.