Asian stocks mostly higher after Wall Street gains

Posted: Updated:
By JOE McDONALD
AP Business Writer

BEIJING (AP) - Most Asian stock markets rose Monday after major Wall Street indexes hit new highs and China reported unexpectedly strong economic growth.

KEEPING SCORE: Hong Kong's Hang Seng gained 0.3 percent to 26,476.30 points and Seoul's Kospi added 0.3 percent to 2,322.80. The Shanghai Composite Index lost 1 percent to 3,189.10. Japanese markets were closed for a holiday. Australia's S&P-ASX 200 was unchanged at 5,762.90. Benchmarks in Taiwan, Singapore and Manila also rose.

WALL STREET: Gains by big technology and health care companies pushed U.S. stocks higher for a third day, lifting the Standard & Poor's 500 index, Dow Jones industrial average and Russell 2000 index of smaller-company stocks to record highs. Energy companies helped lift the market as crude oil prices rose. High-dividend stocks such as real estate companies and utilities also posted big gains following a drop in bond yields. Investors brushed off a report showing U.S. retail sales declined in June and drew encouragement from data indicating industrial production rebounded. The S&P 500 index gained 0.5 percent to 2,459.27. The Dow rose 0.4 percent to 21,637.74. The Nasdaq composite added 0.6 percent to 6,312.47.

CHINESE GROWTH: Data showed China's economic growth held steady at 6.9 percent in the quarter ending in June, exceeding most forecasts. Growth was boosted by unexpectedly strong retail sales and trade, which offset softer investment. Forecasters warned that strength was unlikely to last because tighter controls on bank lending aimed at cooling a surge in debt will weigh on investment, a major component in growth.

CHINESE DEBT MANAGEMENT: President Xi Jinping called at a weekend meeting of Chinese leaders on financial reform to focus on containing risk and to "go back to the origin" of supporting real economic activity. Regulators are tightening controls on bank lending to cool surging debt that analysts cite as the biggest potential threat to economic growth. Analysts said Xi's comments suggest efforts to tighten regulation will be extended.

FED WATCH: Unexpectedly weak U.S. consumer inflation prompted analysts to question whether the Federal Reserve would be ready to go ahead with another possible interest rate hike. The consumer price index fell to 1.7 percent in June from January's 2.3 percent. "The Fed has hiked rates three times in three quarters but we no longer think it will go 4-4 in September," said DBS Group in a report. "The safe and probably wise thing to do is to sit tight - wait and see how the data play out before continuing with interest rate normalization."

ENERGY: Benchmark U.S. crude gained 12 cents to $46.66 per barrel in electronic trading on the New York Mercantile Exchange.

CURRENCY: The dollar gained to 112.66 yen from Friday's 112.52. The euro declined to $1.1460 from $1.1471.

Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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