Asia-Pacific Shares: Mixed Reaction to China GDP Beat Amid New Concerns Over Persistent COVID InfectionsChina Economy Grew 2.3% in 2020, but Rebound in COVID-19 Cases Could Impact Activity in the Run-up to Next Month’s Long Lunar New Year holidays.
The major Asia-Pacific stock indexes are under pressure early Monday as investors in the region await Chinese economic data, including the country’s GDP print for the fourth quarter. But questions should be raised about the potential impact of these numbers on the stock market since they represent stale data and a time when China appeared to be free and clear of fresh cases of the coronavirus. Remember, the stock market is forward looking so there is no guarantee that strong numbers will be supportive.
At 01:48 GMT, Japan’s Nikkei 225 Index is trading 28260.74, down 258.44 or -0.91%. Hong Kong’s Hang Seng Index is at 28491.73, down 82.13 or -0.29% and South Korea’s KOSPI Index is at 3050.68, down 35.22 or -1.14%.
In China, the Shanghai Index is at 3557.83, down 8.55 or -0.24% and Australia’s S&P/ASX 200 Index is at 6663.70, down 51.70 or -0.77%.
China’s Economic Recovery to Quicken in Fourth Quarter, Herald Stronger 2021
China’s economic recovery likely accelerated in the fourth quarter, driven by stronger demand at home and abroad and policy stimulus which is expected to provide a solid boost into 2021, according to Reuters. This is expected to be the rally cry for bullish traders.
Analysts polled by Reuters forecast GDP grew 6.1% in October-December from a year earlier, accelerating from the third quarter’s 4.9% pace. That would bring its full-year expansion to 2.1%, likely making China the only major economy to see growth last year but still the country’s weakest pace in more than four decades.
Rebound in COVID-19 Cases in China Could Dampen Bullish GDP Data
A recent rebound in COVID-19 cases in China could impact activity and consumption in the run-up to next month’s long Lunar New Year holidays.
China reported the highest number of daily COVID-19 cases in more than 10 months, official data showed on Friday, due to a severe outbreak in the northeast that has put more than 28 million people under lockdown.
China Reports 109 New COVID-19 Cases as Infections Persist in Northeast
In breaking news, China reported more than 100 new COVID-19 cases for the sixth consecutive day, with rising infections in the northeast fueling concerns of another national wave ahead of a major holiday season.
The National Health Commission said in a statement on Monday that a total of 109 new COVID-19 cases were reported on January 17, unchanged from a day earlier. Of the 93 local infections, 54 were reported in Bebei province that surround Beijing. Northeastern Jilin province reported a record 30 new cases, underscoring the risk of new clusters emerging.