Asia: Markets mixed as China’s economy meets forecasts

Markets were mixed on Tuesday as positive Chinese economic data was offset by weak consumer spending, while optimism that governments will hammer out deals to avoid the worst of Donald Trump’s tariff threats provided support.

Beijing said gross domestic product expanded 5.2 per cent in April-June thanks to a surge in exports as businesses front-loaded shipments ahead of the US president’s stiff levies, and after the superpowers agreed to work on a long-term pact.

While the reading was slightly slower than the first quarter, it was in line with forecasts in an AFP survey and comes after figures on Monday showed exports soared more than expected in June, including a strong recovery in goods sent to the United States.

Meanwhile, industrial output came in above expectations.

However, Tuesday’s reports showed efforts to boost consumer activity continue to fall flat, with retail sales expanding 4.8 per cent last month, well below estimates in a Bloomberg study and highlighting the work leaders face in kickstarting the economy.

China’s recovery has been hamstrung by a bruising trade war with the United States, driven by Trump’s sweeping tariffs, though the two de-escalated their spat with a framework for a deal at talks in London last month.

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But observers warn of lingering uncertainty.

“The national economy withstood pressure and made steady improvement despite challenges,” National Bureau of Statistics (NBS) deputy director Sheng Laiyun told a news conference.

“Production and demand grew steadily, employment was generally stable, household income continued to increase, new growth drivers witnessed robust development, and high-quality development made new strides,” he said.

And the US president upped the ante Monday, warning Russia’s trading partners - which include China - that he will impose tariffs reaching 100 per cent if Moscow fails to end its war on Ukraine within 50 days.

After a strong start to the day, Hong Kong pared an early rally while Shanghai dipped into negative territory.

Elsewhere, Tokyo, Sydney, Singapore, Wellington, Taipei and Jakarta rose, with Seoul and Manila in the red.

Trump also Monday said he will impose antidumping duties on most imports of fresh tomatoes from Mexico, with the US Commerce Department accusing its neighbour of engaging in unfair trade.

That came after he said he would hit the country and the European Union with 30 percent levies, having announced a slew of measures against key partners last week if deals are not struck by Aug 1.

However, analysts said investors viewed the warnings as negotiating ploys rather than a genuine move, citing previous threats that were later rowed back.

The mixed performance in Asian markets followed a healthy day on Wall Street, where the Nasdaq hit another record high.

Bitcoin edged down after hitting a record high above US$123,200 on Monday thanks to optimism over possible regulatory changes for crypto assets in the United States. AFP