Asia Markets Edge Up Despite Slowing China Growth

Asian markets edged up Friday despite China reporting its economy grew at its slowest pace for more than three years, as investors expressed relief the figures were in line with expectations.

Official data showed expansion slowed to 7.6 percent in the second quarter, but the figures were cheered by some traders who thought they would encourage the government to take fresh moves to stimulate growth.

Hong Kong was up 0.28 percent, Tokyo rose 0.14 percent, while Sydney put on 0.63 percent and Seoul was up 0.67 percent. Shanghai was flat, edging down 0.03 percent.

Markets had slumped Thursday as nervousness mounted ahead of the release of the figures from China, a key engine of growth for the faltering global economy at a time Europe and the U.S. are in economic peril.

But there was relief after the data was released, with investors cautiously returning to the market after the previous day's heavy sell-off.

"The fact the numbers are not as bad as people had feared gives the market a boost," Francis Lun, managing director at Lyncean Securities in Hong Kong, told Dow Jones Newswires.

"Also, the government is expected to further introduce monetary policies (such as a cut in banks' reserve requirements)," he said.

China has since December made three such cuts, reducing the amount of money banks must hold in reserve, in the hope of injecting more money into the economy.

And the government has cut interest rates twice since the beginning of June.

The data from the National Bureau of Statistics showed that second-quarter expansion pulled down growth for the world's second-largest economy to 7.8 percent for the first half of the year.

The 7.6 percent second quarter growth was the slowest since 6.6 percent in the first quarter of 2009 when China and the rest of the world were struggling to emerge from the financial crisis.

The government's full-year growth target is 7.5 percent.

Growth in retail sales, the main gauge of consumer spending, continued to slow in June, the bureau said, as did output from China's millions of factories and workshops.

But there was a sign that government measures to inject more vigor into the economy were starting to work, with China's urban fixed asset investments rising 20.4 percent in the first half of 2012 compared with a year earlier, the bureau said.

On currency markets in Asian trade, the euro was under fresh selling pressure after ratings agency Moody's on Friday downgraded Italy's government bond rating.

The common currency bought 1.2195 and 96.74 yen in Tokyo morning trade, from $1.2203 and 96.75 yen in New York. The dollar fetched 79.33 yen against 79.28 yen.

Oil slipped on the data from China, which is the world's largest energy consumer.

New York's main contract, light sweet crude for delivery in August, fell 21 cents to $85.87 a barrel and Brent North Sea crude for August delivery shed 12 cents to $100.95.

Gold was worth $1,570.40 an ounce at 0330 GMT, compared with $1,564.75 late Thursday.