Asian shares up after China data, European gains

Asian markets rose yesterday, led by Shanghai and Hong Kong, after better-than-expected Chinese economic growth data, while a successful French bond sale and gains in European stocks also lent support.
However, the eurozone debt cloud continued to hang over trade as Friday’s downgrade of nine countries, including France, was followed by a ratings cut for the bailout fund set up to help under-pressure European economies.
Shanghai surged 4.18 percent, or 92.18 points, to 2,298.38 and Hong Kong rallied 3.24 percent, or 615.55 points, to 19,627.75.
Tokyo gained 1.05 percent, or 88.04 points, to 8,466.40, Sydney finished 1.65 percent, or 68.3 points, higher at 4,215.6, while Seoul rose 1.48 percent, or 27.59 points, to 1,886.86.
China in the morning released figures showing the world’s second-largest economy grew 8.9 percent in the last quarter of 2011, which although slower than the previous three months was better than the 8.6 percent expected.
Over the whole of 2011, growth slowed to 9.2 percent from 10.4 percent the previous year.
The figures indicated that while the economy was clearly slowing as a result of troubles in its key export markets in Europe and the United States, it was not having a worrying impact.
“The GDP numbers seem to have reassured traders that a hard landing can be avoided and the slowdown is being managed better than first appeared,” Justin Harper, head of research at IG Markets in Singapore, said in a note, according to Dow Jones Newswires.
The euro was given some much-needed support, rising to USD 1.2756 in early European trade. It had slumped to as low as USD 1.2624 in Toronto late Monday. New York was closed Monday for a public holiday.
The single currency also bought 97.74 yen, against 97.25 yen, while the dollar was at 76.62 yen, compared with 76.78 yen.
Asian markets mostly won back the previous day’s big losses, fuelled by Friday’s downgrade of France’s triple-A rating by Standard & Poor’s as well as that of Austria and seven other nations. It did however hold Germany’s top-notch rating.
Confidence was stoked after Paris sold 8.59 billion euros’ worth of short-term bonds Monday at a lower interest rate than a previous similar auction, despite the loss of its gold-standard rating.
Also, Moody’s Investors Service soothed some of the pain, confirming France’s top-class rating.
London’s FTSE 100 closed 0.37 percent higher and Paris’ CAC 40 added 0.89 percent and Frankfurt’s DAX 30 jumped 1.25 percent.
Yesterday morning, the major European markets extended their gains, putting on at least one percent.
However, the first major test of France’s fiscal credibility comes on Thursday, when it attempts to sell between 7.5 and 9.5 billion euros’ worth of longer term bonds.
Adding to the unease was news that S&P had on Monday cut the triple-A rating of the European Financial Stability Facility (EFSF), the main tool leaders hope to use as a safety net for indebted nations.
“While a better-than-expected take up of French bonds may calm some, the more serious issue of Greek restructuring looms ominously on the horizon,” said Harper at IG Markets.
Stalled talks between private lenders and debt-wracked Greece have also raised fears that Athens will not be able to write down part of its debt, which is considered vital to avoiding a messy default.
On oil markets, New York’s main contract, West Texas Intermediate crude for delivery in February, gained USD 1.89 to USD 100.59 in the afternoon.
Brent North Sea crude for March delivery was up 83 cents at USD 112.17.
Gold was at USD 1,661.10 an ounce at 0815 GMT, against USD 1,645.10 late Monday.

(AFP)