SYDNEY – Asia’s shares pared losses on Tuesday as China’s economy recorded a stronger-than-expected recovery from punishing pandemic lockdowns last year that led to a major slowdown.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.2 percent, a smaller decline than the 0.4 percent fall earlier in the session.
China’s economy grew 4.5 percent year on year for the first quarter which eclipsed the expectations of most economists.
The currencies of Australia and New Zealand, whose exports are reliant on Chinese demand, both popped higher after the GDP data.
Hong Kong’s Hang Seng Index was down 0.4 percent in early trade on Tuesday while China’s blue chip CSI300 Index gained 0.3 percent.
“On balance, quite an encouraging report with retail sales, GDP and property sales coming in higher than expected … reinforces the story that recovery momentum post-pandemic remains intact,” said Christopher Wong, a currency strategist at OCBC in Singapore.
Separate data on March activity also released on Tuesday showed retail sales growth beat expectations and hit a near two-year high, while factory output growth also sped up.
For 2023, GDP growth was expected to pick up to 5.4 percent, a Reuters poll showed, from 3.0 percent last year, which was one of its worst performances in nearly half a century due to the pandemic.
China’s government has set a 5 percent target for economic growth for this year after missing the 2022 goal.
In Asian trade, the yield on benchmark 10-year Treasury notes rose to 3.5889 percent compared with its US close of 3.591 percent on Monday.
The two-year yield, which rises with traders’ expectations of higher Fed fund rates, touched 4.1773 percent compared with a US close of 4.188 percent. – Reuters
