Singapore: Most Asian stock markets fell on Thursday as investors worried that China would take more measures to cool its economy after reporting its fastest quarterly growth in two years.
However, Japan’s Nikkei index gained about 1% on a stabilising yen and positive sentiment for tech stocks, although the gains were capped by China-related caution.
“It’s not anything specific, just putting together bits of things -- recent brokerage upgrades of tech companies, US tech results, higher prices for chips,” said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.
TDK, which makes parts for hard disk drives, jumped after Citigroup upgraded the stock, partly citing strong demand for personal computers and low hard drive inventory levels.
The dollar surged to a four-month high against a basket of currencies as the euro fell. Possible tightening in China also drove investors to sell currencies leveraged to global growth, like the Australian, New Zealand and Canadian dollars.
China’s fourth-quarter gross domestic product was up 10.7% compared with a year earlier, below market expectations of 10.9% but up sharply from 9.1% in the third quarter.
“Obviously the month-on-month growth momentum is very strong,” said Xing Ziqiang, an economist at CICC in Beijing. “So I think the chances for us to see an interest rate rise in the first quarter are increasing.”
Some investors fear China’s moves could impede a still-weak global economic recovery and curb its insatiable demand for commodities and other imported goods. But most economists agree that gradual and modest tightening moves by the Chinese central bank would do little to rob the economy of its strong momentum.
China’s economic growth is expected to accelerate to 9.5% this year even if there are one or two rate rises, according to a Reuters poll of economists. The economy grew 8.7% in 2009.
“It’s not tightening yet, but the market tends to sensitively react to any signs of tightening policy at an early stage,” said Masaru Hamasaki, senior strategist at Toyota Asset Management in Tokyo. “We’re still in that very precarious place.”
“But once we pass this phase, investors will likely shift their focus to the strength in the economy and expectations for solid earnings.”
The MSCI Asia-Pacific index excluding Japan dropped more than a percent for the second consecutive day.
Hong Kong stocks fell 2% to their lowest level in more than three months as investors exited Chinese banks and property stocks on fears of further tightening measures by China.
China’s key stock index staged a mild rebound, led by banks, as fears over official liquidity tightening eased while fresh data depicted an economy on track for a full recovery.
Indian shares dropped more than 2% as engineering and construction conglomerate Larsen & Toubro slumped after its quarterly sales declined. Singapore and Taiwan stocks fell more than a percent.
Australian stocks slipped less than a percent, dragged down by miners like BHP Billiton Ltd and Rio Tinto Ltd.
Seoul shares also rose with sentiment helped by the China data, with LG Display and Hynix advancing following their quarterly results and outlook comments.
Copper, which is seen as an indicator of Chinese growth because of its wide use in industry, fell nearly 1% in Shanghai on the data.
Oil was steady near $78 after the Chinese data offset bearish sentiment following a World Bank outlook highlighting risks that the global economic recovery may run out of steam.
Gold steadied above $1,110 an ounce, after briefly trimming gains on increased concern that Beijing may rein in the country’s rapid expansion and sent the dollar higher.