Asian shares mixed after US growth data

Asian shares mixed after US growth data

HONG KONG - Asian markets were mixed on Monday while the dollar slipped after US economic growth data came in below forecast owing to deep federal spending cuts.

With Tokyo and Shanghai closed and the May Day bank holiday coming up on Wednesday, trading was quiet while there were few other catalysts to drive activity.

Hong Kong added 0.13 per cent and Sydney was up 0.52 per cent while Seoul was 0.34 per cent lower. Singapore was up 0.30 per cent.

The main focus was Friday's release in Washington of data showing the world's biggest economy expanded 2.5 per cent in the January-March quarter.

While the figures from the Commerce Department marked a solid rebound from 0.4 per cent growth in the previous three months, they were lower than the 2.8 per cent economists had predicted.

The US economy has been hit by the "sequester" spending cuts worth tens of billions of dollars that kicked in at the start of March and which lawmakers are no closer to resolving owing to political gridlock.

However, the results reinforced expectations that the Federal Reserve would not tighten monetary policy in the near future.

Investors are now waiting to see what comes out of the Fed's two-day policy board meeting beginning on Tuesday.

On Wall Street Friday, the Dow ended flat, the S&P 500 dipped 0.18 per cent and the Nasdaq lost 0.33 per cent.

"Friday's soft reading from the US will strengthen the hand of those at the (Federal Reserve) who want the pace of monetary stimulus maintained," Niall King, a sales trader at CMC Markets in a note to clients, according to Dow Jones Newswires.

The dollar sank in New York on Friday to 97.99 yen (S$1.24) and on Monday fell further in Asia, buying 97.47 yen.

The euro bought US$1.3050 (S$1.61), compared with US$1.3029 in New York late Friday, while the single currency was also at 127.27 yen, from 127.76.

Dealers will be looking to several events this week, including the release of Chinese manufacturing numbers, a European Central Bank policy meeting and US non-farm payrolls figures.

Oil prices eased, with New York's main contract, light sweet crude for delivery in June, dropping 37 cents to US$92.63 a barrel and Brent North Sea crude for June delivery shedding 36 cents to US$102.80.

An ounce of gold fetched US$1,469.80 at 0300 GMT, compared with $1,465.00 late Friday.

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