Asian stocks drop with Aussie as data shows weaker China growth

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WELLINGTON/HONG KONG (Apr 15): Asian stocks fell from an almost seven-year high and the Australian dollar slid against most peers as data showed China’s economy slowed to the weakest pace of expansion since 2009 last quarter. Crude oil rose for a fifth day.

The MSCI Asia Pacific Index dropped 0.3 percent by 11:10 a.m. in Tokyo, as the Hang Seng Index fluctuated after a 1.6 percent slide Tuesday. Australia’s S&P/ASX 200 Index slipped 0.6 percent as the Aussie weakened 0.4 percent versus the dollar. Standard & Poor’s 500 Index futures fell 0.1 percent. Oil in New York and London rose at least 0.5 percent. Wheat and corn fell.

China’s economy expanded 7 percent in the first quarter while industrial production, fixed asset investment and retail sales growth in the period missed economists’ estimates. The weak report may boost speculation that the government will expand stimulus amid a wave of global monetary easing. The European Central Bank reviews interest rates Wednesday.

“The government recently rolled out a series of easing measures, which likely supported activity,” Goldman Sachs Group Inc. economists led by Song Yu wrote in a note before the release. “The anti-corruption campaign’s drag on growth likely became smaller, after the most intensive entertainment and gift- giving period passed.”

Japan’s Nikkei 225 Stock Average was little changed as the yen weakened 0.2 percent to 119.64 per dollar. The currency climbed as much as 0.9 percent Tuesday. The Bloomberg Dollar Spot Index, which tracks the greenback versus 10 major peers, was up 0.1 percent after lackluster U.S. retail sales data spurred Tuesday’s 0.7 percent drop.

China Outlook

The Aussie weakened for the third time in four days, declining to 75.97 U.S. cents. China is the southern country’s biggest trading partner.

The People’s Bank of China has relaxed rules on home buying, cut rates twice and pared banks’ reserve ratios the past six months in a bid to stoke growth.

Oil Gains

In the oil market, West Texas Intermediate crude climbed 0.5 percent to $53.55 a barrel, extending its five-day gain after March’s 4.3 percent drop. Brent oil added 0.9 percent to $58.93 a barrel, headed for its highest close since April 7.

Iran became the second OPEC member this month to suggest reducing the group’s production target, with Oil Minister Bijan Namdar Zanganeh on Tuesday urging a cut of at least 5 percent to stem a glut.

Industry data released after the close of Tuesday trading in the U.S. was said to indicate the rate of inventory increases had eased, with the government to report on supplies Wednesday after saying earlier in the week that the shale boom is ending.

Wheat futures for July delivery declined for a third straight day, slipping 0.4 percent to $4.9475 a bushel to bring its drop this week to more than 5 percent amid forecasts for rain across U.S. producing regions. Corn dropped 0.3 percent, retreating for the seventh time in eight days.

Intel Corp. climbed more than 2 percent in extended U.S. trading after reporting earnings. The world’s largest computer chipmaker posted steady first-quarter sales and an increase in net income. Revenue in the second three months will be $13.2 billion, plus or minus $500 million, compared with an average analyst estimate of $13.45 billion, the company said.

JPMorgan Chase & Co. advanced 1.6 percent in ordinary Tuesday trading after the biggest U.S. bank said profit rose 12 percent to top estimates. Wells Fargo & Co. slipped 0.7 percent as its lending margin slid below 3 percent for the first time since the 1990s.