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Asian Sentiment Boosted by China’s GDP

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Asian sentiment was broadly higher during the Asian trade session as most of the Asian and Pacific Rim indices were broadly higher by the afternoon.

China’s gross domestic product (GDP) came in as expected this morning. This data was for the final quarter of 2019.

The world’s second largest economy, for the fourth quarter of 2019, came in at six percent. This put the overall economic growth for China at 6.1 percent for last year.

Asian traders breathed a sigh of relief that China’s economy was able to expand at six percent while embroiled with a bitter trade war with the United States.

By the afternoon, headline mainland indices were higher. The Shanghai composite gained 0.47 percent while shares on the smaller Shenzhen composite added 0.22 percent. The Shenzhen component added 0.48 percent.

In Hong Kong, the Hang Seng index added 0.54 percent.

In Japan, the Nikkei 225 was up 0.38 percent and the broader Topix index, in Tokyo, added 0.29 percent. In South Korea the Kospi composite index reversed early gains to trade around the flat line.

Earlier in the session, The Bank of Korea left monetary policy and rates as is. They left their main refinance rate at 1.25 percent as expected.

Elsewhere in the Asian and Pacific Rim, the Australian ASX 200 was up well over half a percent as share of mining companies led the way higher.

Asian and Global Traders Wait on Economic Data out of the U.S.

On the U.S. economic calendar, Forex traders will look at the JOLTS jobs openings and housing data. The University of Michigan will release their preliminary inflation data. However the key release is the University of Michigan consumer sentiment index.

Since the University of Michigan consumer index hit a 34 month low in August 2019, the index has been recovering steadily. This index has improved from the August reading of 89.8 to 99.3 seen in November. Traders are expecting this trend of improvement to continue in the month of December.

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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