Asian markets were mixed on Thursday after China released a raft of key data indicating solid but slowing growth while the Federal Reserve chief said the US central bank would maintain its stimulus until the recovery was well under way.
China’s growth slowed to 7.9 per cent in the second quarter, down from 18.3 per cent in the previous three months when the economy roared back to life after last year’s pandemic-enforced shutdown.
The National Bureau of Statistics said the world’s second-largest economy continued to “recover steadily”, but sounded a note of caution over external uncertainties and the uneven domestic economic rebound. “Efforts are still needed to consolidate the foundation for stable recovery and development,” it added.
In June, industrial output rose 8.3 per cent and retail sales grew 12.1 per cent, both edging down from the month before.
“The overall growth perspective is still pretty resilient in terms of industrial production and retail sales,” Helen Qiao, chief Greater China economist at Bank of America Securities, told Bloomberg Television.
The overall growth perspective is still pretty resilient in terms of industrial production and retail sales- Helen Qiao, chief Greater China economist at Bank of America Securities
Investors were also digesting dovish comments by Fed chair Jerome Powell, who acknowledged inflation was stronger than the US central bank would like but said the economy still had “a long way to go”. The Fed “will ensure that monetary policy will continue to deliver powerful support to the economy until the recovery is complete,” Powell said Wednesday in his semi-annual testimony to Congress.
The Dow and S&P 500 posted slight gains following Powell’s comments but the Nasdaq finished lower. It was a mixed picture in Asian markets. Hong Kong was up 1.3 per cent, with Shanghai, Seoul and Taipei also posting gains, while Tokyo gave up 0.9 per cent and Singapore and Sydney also retreated.
“Powell’s semi-annual testimony did not deliver any bombshell pivots that the Fed is concerned about overheating the economy or that pricing pressures may remain elevated a lot longer than initially expected,” OANDA analyst Edward Moya said. “The dovish stance of the Fed was confirmed since Powell believes the economy is clearly nowhere near to seeing substantial further progress to begin scaling back asset purchases.”
Oil prices fell in Asian trade, with both main contracts down about one per cent after data showed a rise in US stockpiles.