Asia stocks higher as Shanghai steadies after dramatic dive
SEOUL, South Korea (AP) Asian stock markets rose Tuesday, and Shanghai rebounded from a dramatic dive the day before, after China's economic slowdown in the fourth quarter wasn't as sharp as feared.
KEEPING SCORE: China's Shanghai Composite was up 2.1 percent at 3,180.76 after plunging 7.7 percent on Monday in reaction to a regulatory clampdown on brokerages financing the stock purchases of investors. Japan's Nikkei 225 rose 1.5 percent to 17,265.40 and South Korea's Kospi gained 0.7 percent to 1,916.98. Hong Kong's Hang Seng was up 0.6 percent to 23,889.77. Australia's S&P/ASX 200 shed 0.1 percent to 5,301.70.
CHINA GDP: China's economy expanded 7.4 percent last year, which was its weakest performance in 24 years, but fourth quarter growth of 7.3 percent was slightly higher than expected. China's slowdown is partly a function of Beijing's efforts to transform the economy, weaning it off overreliance on heavy industry and trade in favor of domestic consumption. But the transition has been buffeted by a range of problems, including a slumping property market and uneven exports.
ANALYST'S TAKE: "With growth moderating in China, the next phase of the country's economic prosperity is being mapped out through fiscal regulation and sustained growth targets," said IG strategist Evan Lucas in a market commentary. "Those ideas mean the central government is also looking to moderate rampant speculation, encourage sustained growth for domestic demand and ensure private enterprise becomes more self-sufficient."
GLOBAL GROWTH: The International Monetary Fund lowered its forecasts for global growth over the next two years, warning that persistent weakness in most major economies will outweigh the boost from lower oil prices. The IMF downgraded the projections it issued in October by 0.3 percentage point each, predicting global growth at 3.5 percent this year and 3.7 percent in 2016.
CHINA CURBS: Investors appeared to have regained some confidence in Chinese markets a day after the Shanghai index plunged in response to curbs on margin trading. The China Securities Regulatory Commission's decision was a sign authorities are worried about the market's big gains in recent months that have been fueled by borrowed money. IG said the clampdown could be helpful for China's economy in the longer term as it might help redirect lending to more productive uses.
ENERGY: Benchmark U.S. crude was down $1.24 to $47.89 a barrel in electronic trading on New York Mercantile Exchange. The contract jumped $2.40 on Monday to settle at $49.13. Brent crude, a benchmark for international oils, fell 13 cents to $48.71 a barrel in London.
CURRENCIES: The dollar rose to 118.21 yen from 117.81 yen. The euro fell to $1.1583 from $1.1591.