Global Markets Upbeat Japan GDP brings some Asia cheer, but Nikkei misses out

Business & Markets 2013
Written by Reuters
Thursday, 16 May 2013 14:26
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SYDNEY (May 16): Most stock markets in Asia edged up on Thursday
after solid growth data from Japan improved sentiment, although
Tokyo's Nikkei lagged, while worries about a prolonged recession in the
euro zone kept the common currency under pressure.
Financial spreadbetters expect Britain's FTSE 100 to open 1 to 3 points
lower, Germany's DAX to open down 11 to 12 points, or as much as 0.1
percent, and France's CAC 40 to open 6 to 7 points lower, or as much
as 0.2 percent.
U.S. stock futures were marginally weaker, pointing to a soft opening on
Wall Street after the Dow and S&P 500 hit fresh record highs on
Wednesday.
Mainland China stocks rose 1.4 percent and South Korean shares
gained 0.8 percent, while MSCI's broadest index of Asia-Pacific shares
outside Japan held steady.
"The market is turning around as optimism is growing that efforts by
global governments including South Korea's to stimulate the economy
will pay off," said Lee Jae-mahn, a market analyst at Tong Yang
Securities.
The Nikkei, however, fell 1 percent after earlier hitting a fresh 5-1/2-year
high. Still, it is up nearly 44 percent so far this year.
"The pace of the rise has been too fast. It's a healthy correction," said Norihiro Fujito, strategist at Mitsubishi UFJ Morgan
Stanley Securities of the Nikkei.
Japan's economy grew 0.9 percent in the first quarter, the quickest pace in a year, beating expectations for a growth rate of
0.7 percent.
"This is undoubtedly very strong growth, and very positive for Japan's economy," said Yoshiki Shinke, senior economist,
Dai-Ichi Life Research Institute in Tokyo.
"It's no longer just about brightening sentiment and rises in equities prices. There's now proof that Abenomics is working and
that the economy is on a solid footing."
The report stood in stark contrast to the euro zone, which showed the region contracting for a sixth straight quarter as France
slid into recession and Germany registered mere 0.1 percent growth.
The euro zone data had raised expectations for more monetary easing by the European Central Bank, prompting investors to
sell the euro.
The euro slipped 0.1 percent to $1.2877, having hit a six-week low of $1.2843 on Wednesday. Against the yen, it was at
131.62, off a three-year peak of 132.78 set earlier in the week.
"The euro zone has registered six straight quarters of contraction and any recovery is likely to be limited in the months
ahead," said Mitul Kotecha, global head of foreign exchange at Credit Agricole in Hong Kong.
"Pressure on the ECB to provide more policy accommodation will only be reinforced by today's release of the April CPI data
leaving the euro under further pressure. Near term technical support for EUR/USD is seen around 1.2772."
Gold also struggled after a 2 percent slide in the previous session. Spot gold was around $1,395 an ounce, having briefly
touched a fresh one-month low near $1,387.
Brent crude fell 0.4 percent to $103.22 a barrel, giving back some of Wednesday's 1.0-percent gain. -- Reuters