Asia stocks lukewarm after China growth report

Associated Press

TOKYO (AP) — Asian stock markets were lukewarm Wednesday after China met expectations of solid but unspectacular growth in the second quarter.

The world's second-largest economy expanded 7.5 percent over a year earlier in the April-June quarter, picking up slightly from 7.4 percent growth in the first quarter, and suggesting the government's mini-stimulus measures had helped to offset a housing slowdown.

The Nikkei 225, the benchmark for the Tokyo Stock Exchange, was little changed at 15,379.30, closing down 0.1 percent after zigzagging in a short range throughout the day.

Hong Kong's Hang Seng added 0.1 percent to 23,489.78, while Seoul's Kospi inched up 0.04 percent to 2,013.48.

China's Shanghai Composite reversed earlier gains to fall 0.2 percent to 2,067.17 while Australia's S&P/ASX 200 inched up 0.1 percent to 5,518.90.

Other Asian stock markets were mostly higher, including shares in Singapore, Indonesia and Thailand.

Communist leaders in China have been trying to boost domestic consumption to drive the economy as its longstanding engines of exports and industrial investment lose momentum. They have acknowledged that growth won't return to the double-digit rates experienced for much of the preceding decade.

"The results were merely in line with expectations. There was relief but nothing was new," said Nobuhiko Kuramochi, head of the investment information department at Mizuho Securities Co. in Tokyo.

In Tuesday's trading, markets drifted as U.S. Federal Reserve chair Janet Yellen did not deviate too much from previous comments and following some lackluster U.S. retail sales figures.

The main focus had been on Yellen, who was delivering her half-yearly testimony to Congress. She largely stuck to her previous script telling lawmakers that the Fed intends to keep providing significant support to the U.S. economy to boost growth and improve labor market conditions.

Her comments didn't dislodge market expectations that the first interest rate increase from the Fed will come next summer. Yellen said the Fed's current monthly bond purchases will likely end in October.

Yellen spoke after figures showed U.S. retail sales grew by only 0.2 percent in June, less than the 0.6 percent expected. However, May's figures were revised up to show a 0.5 percent increase, so the net effect was negligible.

"Today's retail sales report, while not terrible by any means, just isn't all that great," said Dan Greenhaus, chief strategist at BTIG.

In Europe, Britain's FTSE 100 closed down 0.5 percent at 6,710.45 and the CAC-40 in France fell 1 percent to 4,305.31. Germany's DAX fell 0.7 percent to 9,719.41.

In the U.S., stocks finished the day mixed, with the Dow Jones industrial average eking out a tiny gain.

The Dow added 0.03 percent, to 17,060.68 while the Standard & Poor's 500 fell 0.2 percent to 1,973.28. The Nasdaq composite shed 0.5 percent to 4,416.39. The three stock indexes are all up for the year.

In currencies, the euro slipped to $1.3558 from $1.3571 late Tuesday. The dollar edged up to $101.73 yen from 101.68 yen.

Benchmark U.S. crude for August delivery was up 51 cents at $100.47 a barrel in electronic trading on the New York Mercantile Exchange.


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