HONG KONG: Asian shares made modest gains Friday after China said its economy slowed in line with expectations, quashing fears data would show a "doomsday" scenario of the country heading for a hard landing.
The economy expanded 7.6 percent in the second quarter of this year, the slowest pace for more than three years, but investors were relieved the figure was not worse and some focused on the possibility it would spur new stimulus.
Hong Kong closed up 0.35 percent, or 67.52 points, at 19,092.63, while Shanghai was flat, edging up 0.02 percent, or 0.41 points, to finish at 2,185.90.
Tokyo was also flat, adding 0.05 percent, or 4.11 points, to finish at 8,724.12.
Seoul jumped 1.54 percent, or 27.50 points, to finish at 1,812.89, helped by the China data but also rebounding following a heavy loss Thursday after the Bank of Korea unexpectedly cut interest rates.
Sydney finished 0.35 percent, or 14.2 points, higher at 4,082.2.
"Chinese GDP data came in broadly in-line with official consensus numbers, but well ahead of the feared doomsday whisper numbers that had been circulating of something sub-7.0 percent," said Cameron Peacock at IG Markets in Australia.
Markets had slumped Thursday as nervousness mounted ahead of the release of the figures from China, a key engine of growth for the faltering global economy at a time Europe and the US are in economic peril.
But there was relief after the data met expectations. Most traders had already priced in the China figures and were happy to make a cautious return to the market following the previous day's sell-off.
"The fact the numbers are not as bad as people had feared gives the market a boost," Francis Lun, managing director at Lyncean Securities in Hong Kong, told Dow Jones Newswires.
"Also, the government is expected to further introduce monetary policies (such as a cut in banks' reserve requirements)," he said.
China has since December made three such cuts, reducing the amount of money banks must hold in reserve. Such cuts are meant to free up funds for lending and thus boost the economy.
The government has also cut interest rates twice since the beginning of June.
The data from the National Bureau of Statistics showed that second-quarter expansion pulled down growth for the world's second-largest economy to 7.8 percent for the first half of the year.
The 7.6 percent second quarter growth was the slowest since 6.6 percent in
the first quarter of 2009 when China and the rest of the world were struggling to emerge from the financial crisis.
The government's full-year growth target is 7.5 percent.
Growth in retail sales, the main gauge of consumer spending, continued to slow in June, the bureau said, as did output from China's millions of factories and workshops.
Friday's data capped a week of economic indicators from the world's second-biggest economy, which mostly confirmed that economic growth is slowing.
On currency markets, the euro was under pressure after ratings agency Moody's downgraded Italy's government bond rating.
The common currency bought $1.2207 and 96.71 yen in afternoon trade, from $1.2203 and 96.75 yen in New York. The dollar fetched 79.25 yen against 79.28 yen.
Oil slipped on the data from China, which is the world's largest energy consumer.
New York's main contract, light sweet crude for delivery in August, fell seven cents to $86.01 a barrel in the afternoon and Brent North Sea crude for August delivery shed 16 cents to $100.91.
Gold was worth $1,578.13 an ounce at 0900 GMT, compared with $1,564.75 late Thursday.
In other markets:
-- Wellington fell 0.17 percent, or 5.99 points, to 3,495.41.
Telecom Corp. was down 1.2 percent at NZ$2.55, Fletcher Building was off 1.8 percent at NZ$5.98 and Chorus slipped 1.5 percent to NZ$3.28.
-- Taipei fell 0.37 percent, or 26.66 points, to 7,104.27.
Taiwan Semiconductor Manufacturing Co. was 0.13 percent higher at Tw$75.8 while China Steel fell 0.72 percent at Tw$27.4.
-- Manila closed 0.18 percent, or 9.33 points, higher at 5,214.52.
Ayala Land Inc. fell by 0.24 percent to 20.65 points while Philippine Long Distance Telephone Co. gained 4.0 percent to 2,700 pesos.
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