Asian stocks rise after US growth revised higher but gains tempered by China worries

Asian stock markets mostly posted modest gains Wednesday as stronger U.S. growth was tempered by a less rosy outlook for China.

KEEPING SCORE: Hong Kong’s Hang Seng rose 0.1 per cent to 23,857.35 and Australia’s S&P/ASX 200 added 0.9 per cent 5,380.10. Japan’s Nikkei 225 dropped 0.1 per cent to 17,388.45 while China’s Shanghai Composite rose 0.6 per cent to 2,581.67. Seoul’s Kospi inched up less than 0.1 per cent to 1,980.43.

US GROWTH: The U.S. economy grew at a solid 3.9 per cent annual rate in the July-September period, faster than the 3.5 per cent that was initially reported, underlining its status as the only major economy that is gathering momentum. The upward revision was due to higher estimates of spending by consumers and businesses, the Commerce Department said.

THE QUOTE: “Markets received more good news on the US economy,” said Ric Spooner, chief market analyst at CMC in Sydney. “However, local investor focus is likely to be closer to home with mounting concern over China’s economy,” he said. Doubts about China’s ability to sustain growth above 7 per cent are evident in weakness in the Australian dollar and falling iron ore prices, Spooner said.

CHINA JITTERS: The short-lived boost that stock markets got from China’s interest rate cuts on Friday suggests growing pessimism about growth prospects for the world’s No. 2 economy. Growth slipped to a five year low of 7.3 per cent in the third quarter and indicators such as manufacturing have weakened since then. Some forecasters predict growth of less than 7 per cent in China next year.

WALL STREET: Stocks have been drifting gradually higher this month, having rebounded sharply from a slump in October, as investors have grown more confident that actions from central banks around the world will help bolster the global economy. On Tuesday, the Standard & Poor’s 500 fell 2.38 points, or less than 0.1 per cent, to 2,067.03. The Dow Jones industrial average dropped 2.96 points, or less than 0.1 per cent, to 17,814.94. The Nasdaq composite gained 3.36 points, or 0.1 per cent, to 4,758.25.

ENERGY: Oil slid on reports that representatives from Venezuela, Saudi Arabia, Mexico and Russian state oil giant OAO Rosneft failed on Tuesday to agree on any immediate plans to cut output. The oil producing nations were meeting ahead of OPEC’s Thursday meeting. Benchmark crude was down 18 cents at $73.91 a barrel in electronic trading on the New York Mercantile Exchange. It dropped $1.69 to close at $74.09 in Nymex’s Tuesday trading session.

CURRENCIES: The dollar was steady at 117.85 yen. The euro dropped to $1.2470 from $1.2477 late Tuesday. The Australian dollar slipped to $0.8533 from $0.8545.