Asia Markets Cautious but China Growth Figures Upbeat
Asian markets moved cautiously Monday even as Chinese economic growth data beat expectations, with geopolitical concerns weighing on sentiment.
China's economy grew 6.9 percent in the first quarter of 2017, government data showed, marking the second quarterly improvement since the final three months of 2014.
The reading was better than the median analyst expectation of 6.8 percent in an AFP poll, and up on the fourth quarter figure.
But tensions on the Korean peninsula continued to affect markets Monday as US Vice President Mike Pence warned North Korea not to test President Trump's resolve during a visit to the heavily militarised border between the two Koreas.
Relations between Pyongyang and Washington have reached new lows in recent weeks as a series of North Korean weapons tests have prompted warnings from Trump's administration.
Trump last week ordered a naval strike group led by the USS Carl Vinson aircraft carrier to the region, though the vessels remain a long way from the peninsula.
Shanghai fell 0.7 percent, Singapore dropped 0.8 percent while Manila and Jakarta were also down.
"China's financial regulation coupled with geopolitical risks surrounding North Korea have heightened risk aversion and put pressure on stocks," Ken Chen, an analyst at KGI Securities Co. in Shanghai, told Bloomberg News.
But he added that "the downside should be limited as first-quarter figures showed economic fundamentals remained sound."
Monday's figures also showed China's industrial output growth rose to 7.6 percent year-on-year in March, beating a Bloomberg estimate of 6.3.
The readings follow data showing robust foreign trade and a further expansion in factory activity driven by a pickup in production and demand last month.
Elsewhere, Hong Kong and Sydney were closed for a holiday, but Seoul rose 0.5 percent.
Tokyo's benchmark Nikkei 225 index -- which closed at a 2017 low on Friday -- also snapped a four day losing streak to gain 0.1 percent.
Shoichiro Yamauchi, an equity market strategist at Nomura Securities, told Bloomberg that bargain buying helped drag the Japanese market out of the red.
"Japanese shares already declined over the possibility of military action over North Korea last week, and they're fairly cheap," Yamauchi said.
"Technical indicators are signalling shares are in oversold territory, and some investors appear to be short-covering."
Jittery traders nonetheless continued to push into the yen, which is seen as a safe investment in times of turmoil or uncertainty.
In Tokyo, the dollar weakened to 108.37 yen from 108.91 yen in Asia on Friday.
Oil also fell below $53 a barrel amid tensions in the Korean peninsula and on news of increased US drilling activity.
- Key figures around 0730 GMT - Tokyo - Nikkei 225: UP 0.1 percent to 18,355.26 (close)
Hong Kong - Hang Seng: CLOSED
Shanghai - Composite: DOWN 0.7 percent to 3,222.17
Euro/dollar: UP at 1.0639 from $1.0616
Pound/dollar: UP at $1.2539 from $1.2523
Dollar/yen: DOWN at 108.29 yen from 108.91 yen
Oil - West Texas Intermediate: DOWN 40 cents to $52.78
Oil - Brent North Sea: DOWN 42 cents to $55.47
New York - Dow: DOWN 0.7 percent at 20,453.25 (close)
London - FTSE 100: DOWN 0.3 percent at 7,327.59 (close)