SYDNEY (AUSTRALIA) – With data confirming China’s economy bouncing back last quarter as factory output spiked, Asian shares trimmed early losses on Monday. This partly helped offset disappointing news on US consumer spending.
After the economy having grown 6.5% in the fourth quarter, on a year earlier, Chinese blue chips gained 0.8%.
Despite retail sales missing the target, industrial production for December outdid estimates.
“Despite the latest dip in retail sales, we see plenty of upside to consumption as households run down the excess savings they accumulated last year,” said Julian Evans-Pritchard, senior China economist at Capital economics.
“Meanwhile, the tailwinds from last year’s stimulus should keep industry and construction strong for a while longer.”
MSCI’s broadest index of Asia-Pacific shares outside Japan pared losses and were off 0.3%, having touched a string of record surges in recent weeks. Japan’s Nikkei registered a slip of 0.8% which is away from a three-decade high.
E-Mini futures for the S&P 500 slumped 0.2%, though Wall Street remains closed on Monday for a holiday. EUROSTOXX 50 futures eased 0.2% and FTSE futures 0.1%.
The pick-up in China stands in stark contrast to the US and Europe where the pandemic has scarred consumer spending.