Shares in Asia were mixed on Monday after China reported that its economy would expand at an 8.1% annual rate in 2021, although growth has slowed to half that rate. in the previous quarter.
Tokyo, Shanghai and Sydney rose, while Hong Kong and Seoul fell.
The weakening of the Chinese economy by the end of 2021 is leading to suggestions that Beijing should intervene to boost growth by cutting interest rates or by injecting money into the economy through spending on loans. public construction.
Just before the growth data was released, China’s central bank announced it cut the average lending rate for commercial banks to its lowest level since 2020.
“Economic momentum remains weak amid continued virus outbreaks and a struggling real estate sector,” said Julian Evans-Pritchard of Capital Economics. He expects Chinese policymakers to keep lending limits relatively tight and keep credit growth in check.
“The result is that policy easing is likely to soften the recession rather than spur a recovery,” he said.
Slowing activity in China, the region’s largest economy, could slow growth across the region. Lockdowns and other precautions taken to combat the coronavirus outbreak could also exacerbate shortages of critical parts and components, adding to shipping and supply chain difficulties. response.
The Shanghai Composite Index rose 0.3% to 3,532.24, while Hong Kong’s Hang Seng fell 0.6% to 24,220.61.
South Korea’s military said South Korea’s Kospi fell 1.1% to 2,889.98 after North Korea fired two suspected ballistic missiles into the sea early Monday in its fourth weapons launch this month. , the South Korean military said, with the explicit goal of showing off its military might amid a pause in diplomacy with the US. and the pandemic closed borders.
In Tokyo, the Nikkei 225 rose 0.7 percent to 28,318.54 as the government reported machinery orders rose in November as manufacturing activity and private investment improved during a lull as coronavirus outbreak. Orders from shipbuilders increased by 170%.
Australia’s S&P/ASX 200 rose 0.1% to 7,398.70.
On Friday, the S&P 500 rose 0.1% to 4,662.85, rallying sharply in the final minutes of trading after falling about 1% earlier in the day. The tech-heavy Nasdaq was up 0.6 percent to close at 14,893.75. The Dow Jones Industrial Average fell 0.6% to 35,911.81.
Shares of smaller companies also rebounded from the initial slide. The Russell 2000 index rose 0.1% to 2,162.46.
The rally in technology shares, plus gains in energy and other sectors, helped add to the decline in banks and elsewhere in the market on a day in which equity investors mainly focuses on the mix of corporate earnings reports and discourages data on retail sales.
The mixed finish capped a volatile week of trading on Wall Street, which deepened the market’s January drop. The benchmark S&P 500, which has rallied 26.9% in 2021, is now about 2.8% below the all-time high it set on January 3.
The Commerce Department reported Friday that retail sales fell 1.9% in December after Americans slashed their spending in the face of product shortages, soaring prices and the introduction of new products. of the Omicron variant.
It was the latest in a series of economic reports this week that have raised concerns about inflation and its impact on businesses and consumer spending.
Rising prices have prompted businesses to pass more costs on to consumers. Consumers have reduced spending at department stores, restaurants and online due to higher prices and short supply.
Concerns about persistently rising inflation are also prompting the Federal Reserve to cut bond purchases and consider raising interest rates sooner and more often than Wall Street expected less than a year ago. five.
The 10-year Treasury note yield was steady at 1.79%.
U.S. crude oil prices rose 40 cents to $84.22 a barrel in electronic trading on the New York Mercantile Exchange. On Friday, it was up 2.1%, helping to send energy stocks higher.
Brent crude rose 19 cents to $86.25 a barrel.
The US dollar rose to 114.42 Japanese yen from 114.18 yen. The euro was unchanged at $1.1417.
Author Joe McDonald of AP Business Writer in Beijing contributed.