SINGAPORE — Chinese shares rose Monday in a mixed trading session across the Asia-Pacific as official data showed the world’s second largest economy grew faster than expected between October and December.
Numbers from China’s National Bureau of Statistics showed the Chinese economy grew by 8.1% in 2021, slightly below the market’s expectation for around 8.4% growth for the year. In the fourth quarter, China’s GDP rose 4% from a year ago, topping a Reuters poll that predicted a 3.6% increase.
Industrial production also rose and beat expectations, but retail sales had a more muted growth.
Economists were expecting Monday’s data dump to underline a slowdown in growth, in part due to factors like China’s strict measures to contain the omicron Covid variant as well as problems in its property sector and sluggish consumption.
Last week, U.S. investment bank Goldman Sachs slashed its 2022 forecast for China economic growth from 4.8% to 4.3%.
Rest of APAC mixed
The rest of Asia-Pacific markets traded mixed.
The Nikkei 225 in Japan rose 0.69% while the Topix index added 0.42%.
Australian shares also eked out gains as the ASX 200 was up 0.12%. The heavily-weighted financials subindex gained 0.32% and the energy sector was up 1.08%.
The session in Asia follows a mixed finish in the U.S. last Friday, where Wall Street notched a second straight negative week to start the year.
“Markets reacted defensively to disappointing US economic data for December as retail sales fell sharply and manufacturing production declined, hit by a triple whammy of high inflation, ongoing supply shortages and Omicron,” ANZ Research analysts wrote in a Monday morning note.
“We expect the Fed will have to revise up its inflation forecasts and interest rate guidance for coming months at next week’s meeting,” they added.
U.S. markets are closed Monday for Martin Luther King Jr. Day.
Currencies and oil
In the currency market, the U.S. dollar traded 0.07% higher at 95.234 against a basket of its peers, after last week climbing from levels near 94.87.
The dollar could “remain heavy this week and head down towards 94.11,” said analysts from the Commonwealth Bank of Australia in a Monday note.
They noted that there are no policy-relevant economic data releases this week or any scheduled speeches from Fed officials that could influence the market pricing for the U.S. central bank’s rate hikes.
“We expect interest rate markets to continue to favour a March lift-off to the Funds rate,” the CBA analysts said, adding, “At the same time, the view that omicron is unlikely to derail the global economic recovery is a weight on the counter-cyclical USD.”
ANZ analysts said the release of economic data in China are set to affect commodity markets early in the week, but geopolitical tensions “and subsequent supply concerns will remain an important driver of sentiment.”