Asia stocks eke out gains after China data, STI flat

Asian equities bounced back in afternoon trade after having a mixed, but volatile reaction to a slew of data released by Beijing showing major economic growth indicators were mostly in line with expectations.

Major markets saw knee-jerk reactions, round-tripping by rising immediately after the release of data before slipping into negative territory and then recovering.

China's gross domestic product data came mostly in line with market expectations though factory output and retail sales dipped slightly below expectations.

The economy grew by 6.8 per cent in the fourth quarter of last year, slipping by 0.1 per cent from third quarter's 6.9 per cent growth. This was right in line with the median forecast in a Reuters poll. Full-year growth was at 6.9 per cent, down from 2014's 7.3 per cent, and the slowest pace of economic expansion since 1990.

Industrial output for December rose 5.9 per cent on-year, missing a Reuters poll forecast for a 6.0 per cent increase. Full-year industrial output rose 6.1 per cent on-year.

Retail sales also fell slightly short of expectations for December, climbing 11.1 per cent on-year, compared with a forecast for 11.3 per cent, slightly slower than November's 11.2 per cent rise.

After opening on a cautious note, wavering between modest gains and losses, China's Shanghai composite tacked on gains of 0.52 per cent right after the data release, before slipping into negative territory and then climbing to end the morning session up 1.64 per cent. The Shenzhen composite was up 1.40 per cent.

Hong Kong's Hang Seng index was up 0.78 per cent.

Before market open, the People's Bank of China (PBOC) fixed its dollar-yuan mid-point at 6.5596, keeping it stable following the previous session's fix of 6.5590.

Markets react mixed to China data

In Japan, the Nikkei 225 wavered between gains and losses, opening 0.4 per cent lower, and trading up as much as 0.54 per cent after the release of China's growth numbers. In afternoon trade, the index was up 0.21 per cent. At yesterday's close, the index was down some 18.74 per cent from its 52-week high of 20,868.03 set June 2015.

Japanese economics minister Akira Amari said the sell-off in Japanese equities recently was due to external factors such as worries over emerging markets and declines in oil prices, and that Japan's economic fundamentals remained solid, according to Reuters.

The dollar-yen pair traded 0.15 per cent higher at 117.50 from the previous session's close of 117.31. This likely helped boost some major export stocks such Nissan, Sharp, Toyota and Sony, all trading up between 0.34 and 3.25 per cent. A weaker yen is usually considered positive for Japan's exporters as it expands earnings when translated back into the home currency.

South Korea's Kospi erased losses to trade up 0.13 per cent. Korean blue chips traded mixed, with shares of Samsung Electronics up 2.93 per cent, Posco up 0.30 per cent and Hyundai Motor up by 0.72 per cent.

Australia's ASX 200 extended gains in late-afternoon trade, up by 0.81 per cent. Earlier, the index was weighed by the energy sector, which was down 1.53 per cent before recovering marginally to trade down 1.37 per cent. At yesterday's close, the ASX 200 had lost 18.78 per cent since its 52-week high of 5,982.69, set in April 2015, pushing it near bear market territory.

Resources stocks were resilient, with Rio Tinto up 0.49 per cent, after being down as much as 0.59 per cent in early trade, and BHP Billiton up 0.89 per cent. Other iron ore producers such as Fortescue pared gains to trade down 0.96 per cent.

Reports said Rio Tinto plans to increase iron ore production and shipments in 2016, despite multi-year-low iron-ore prices. The mining giant was reported to have increased 2015 annual iron ore shipments by 11 per cent, roughly in line with its guidance of 340 million tonnes. Iron ore prices traded at $41.90 a tonne.

Other Asian markets had a mixed reaction to the China data. Singapore's Straits Times index was up 0.28 per cent before retracing gains to trade flat; Indonesia's Jakarta composite eked out gains of 0.15 per cent earlier before slipping 0.16 per cent; Taiwan's Taiex was initially flat before trading up 0.30 per cent.

US futures also reacted positively to the China data, with the S&P 500 up 0.67 per cent, Nasdaq futures up 0.42 per cent, and the Dow futures up 0.56 per cent. Since then, all three futures eked out further gains, up between 0.75 and 0.84 per cent. Oil remains under supply pressure

Oil prices, meanwhile, remained under pressure from Iran's re-entry into the global supply market after international sanctions on the country were lifted at the weekend.

During Asian trade, US crude futures traded 0.07 per cent lower at $29.40 a barrel, after hitting a 2003 low of $28.36 overnight. Globally traded Brent futures were up 1.54 per cent at $28.99 a barrel, after falling to $28.64 a barrel in the overnight session.

Energy plays in Australia were mostly down, with shares of Santos retracing early losses to trade up 1.52 per cent, Oil Search remained down 3.83 per cent and Woodside Petroleum shed 1.37 per cent.

In Japan, oil stocks traded mixed with Inpex flat and Japan Petroleum up 0.18 per cent. Cosmo Oil was down 2.50 per cent. Reports said the oil company purchased a US crude oil cargo, about 300,000 barrels, making it the first purchase by a Japanese buyer since a four-decade ban on most US crude exports ended.

South Korean energy stocks such as S-Oil, SK Innovation and GS Holdings were down between 1.16 and 2.63 per cent.

Angus Nicholson, market analyst at spreadbetter IG, said in his morning note that with the lifting of sanctions, "oil is now suffering its most intense period of price pressures."

Though a global supply glut exists, Nicholson said "the more pressing question for the oil price will be the pace at which Iranian oil production picks up," after Iranian officials said they were determined to increase production.

Markets in Wall Street were closed overnight for the Martin Luther King Day holiday.