Bangkok, Jan. 17 (BNA): Shares in Asia were mixed on Monday after China announced that its economy expanded at an annual pace of 8.1% in 2021, although growth slowed to half that level in the last quarter.
Tokyo, Shanghai and Sydney stocks rose, while Hong Kong and Seoul fell.
Weakness in the Chinese economy by the end of 2021 is prompting suggestions that Beijing intervene to support growth by cutting interest rates or by pumping money into the economy through spending on public works.
Shortly before the growth data was released, China’s central bank announced a cut in the average lending rate for commercial banks to the lowest level since 2020.
“Economic momentum remains weak amid recurring virus outbreaks and the faltering real estate sector,” Julian Evans-Pritchard of Capital Economics said in a comment. China policy makers are expected to maintain relatively tight limits on lending and control credit growth.
“The result is that policy easing is more likely to ease the economic downturn rather than drive a recovery,” he said, according to the Press Agency (AP).
Slowing activity in China, the region’s largest economy, could halt growth across the region. Shutdowns and other precautions imposed to combat the coronavirus outbreak could also exacerbate shortages of key parts and components, adding to shipping and supply chain difficulties.
The Shanghai Composite rose 0.3% to 3,532.24, while Hong Kong’s Hang Seng fell 0.6% to 24,220.61.
South Korea’s military said the Kospi area sank 1.1% to 2,889.98 after North Korea fired two suspected ballistic missiles into the sea early Monday in its fourth firing this month, aiming to demonstrate its military might amid stalled diplomacy with the United States. The borders are closed due to the epidemic.
In Tokyo, the Nikkei 225 advanced 0.7% to 28,318.54 as the government reported higher machinery orders in November as private investment and manufacturing activity improved during the coronavirus outbreak. Shipbuilders’ orders rose 170%.
Australia’s S&P/ASX 200 rose 0.1% to 7,398.70.
On Friday, the S&P 500 index gained 0.1% to 4,662.85, rising in the last minutes of trading after dropping nearly 1% earlier in the day. The tech-heavy Nasdaq gained 0.6% to close at 14,893.75. The Dow Jones Industrial Average fell 0.6% to 3591.81.
Smaller company stocks also rebounded from the early slide. The Russell 2000 Index rose 0.1% to 2,162.46.
A rally in technology stocks, combined with gains in energy and other sectors, helped to offset declines in banks and elsewhere in the market on a day when investors were primarily focused on a mix of corporate earnings reports and discouraging data on retail sales.
The mixed end to a week of choppy trading capped Wall Street deepening the market’s decline in January. The benchmark S&P 500, which rose 26.9% in 2021, is now about 2.8% below its Jan. 3 high.
The Commerce Department reported Friday that retail sales fell 1.9% in December after Americans cut spending in the face of product shortages, higher prices and the emergence of the omicron variable.
This was the latest in a string of economic reports this week that have raised concerns about inflation and its impact on businesses and consumer spending.
The higher prices encouraged companies to pass on more costs to consumers. Consumers are pulling back from spending in stores, restaurants and online as a result of higher prices and tight supply.
Concerns about rising inflation are also prompting the Federal Reserve to cut its bond purchases and consider raising interest rates earlier and more often than Wall Street expected less than a year ago.
The yield on the 10-year Treasury was stable at 1.79%.
The price of US crude oil rose 40 cents to $84.22 a barrel in electronic trading on the New York Mercantile Exchange. On Friday, it was up 2.1%, which helped lift energy stocks.
Brent crude rose 19 cents to $86.25 a barrel.
The US dollar rose to 114.42 yen from 114.18 yen. The euro remained unchanged at $1.1417.
HF