Asian stock markets rose Monday after Chinese industrial profits rebounded into positive territory and U.S. economic growth was stronger than expected.
KEEPING SCORE: The Shanghai Composite Index advanced 0.8 percent to 3,003.39 points and Tokyo’s Nikkei 225 was up 0.7 percent at 17,119.01. Seoul’s Kospi gained 0.1 percent to 1,985.48 and Taiwan also rose. Hong Kong, Sydney and New Zealand were closed for the Easter holiday. Manila and Jakarta declined. U.S. markets were closed Friday for a holiday.
CHINESE PROFITS: Profit at major Chinese industrial firms rose 4.8 percent from a year earlier in the first two months of 2016 — the first gain since September 2014. That followed a 4.7 percent contraction in December. The National Bureau of Statistics cited stronger sales and a slower decline in producer prices, which have contracted steadily for more than three years. The private sector outperformed government-owned companies, with total profit at private enterprises rising 7.5 percent while those at state industries contracted by 14.5 percent.
ANALYST’S QUOTE: The improved Chinese performance was due to “the release of pent-up demand” following uncertainty about central bank policy in the second half of last year, said Tim Condon of ING in a report. He noted sales revenue rose 50 percent. “We believe steadier PBOC policy since the second week of January released the pent-up demand,” said Condon.
US GROWTH: The government reported the U.S. economy grew by 1.4 percent at an annual rate in the final quarter of last year, above the 1 percent it estimated a month ago. Much of the unexpected strength came from consumer spending on services such as recreation, which helped offset a manufacturing slump. Analysts were encouraged by the revised estimate, saying it provided momentum for the rest of the year, when they expect growth to reach a stronger if still-modest 2 percent annual rate.
CURRENCY: The dollar gained to 113.64 yen from Friday’s 113.08 yen. The euro edged down to $1.1157 from $1.1165.
ENERGY: Benchmark U.S. crude gained 30 cents to $39.76 per barrel in electronic trading on the New York Stock Exchange. The contract shed 33 cents on Friday to close at $39.46. Brent crude, used to price international oils, added 34 cents to $41.37 per barrel in London. It shed 6 cents on Friday.