Asian markets trading higher despite soft Chinese GDP number and North Korean missile launch

<p>Asian stocks shrugged off both a North Korean missile launch and a Chinese GDP print which was below expectations – perhaps a sign that traders […]</p>

Asian stocks shrugged off both a North Korean missile launch and a Chinese GDP print which was below expectations – perhaps a sign that traders are willing to back the future rather than dwell on recent conservatism. News that North Korea filed a missile came out before most regional equity markets opened.

The impact on currencies was minimal, in fact the Australian dollar and the Japanese Yen continued to appreciate despite the launch. The Australian dollar was last trading at 1.0390 against the US dollar, falling slightly in late afternoon trade after being high for most of the session above 1.04. The US dollar was last buying 81.05 against the Yen. The Euro was stable at 1.3168 against the dollar.

In economic news, data showed China’s annualised rate of GDP came in at 8.1% for the first three months of this year, below market expectations of around 8.3%. The number is still very healthy given the rate of decline in manufacturing and the ability to contain inflation in a very short period of time, when taking into considering the peak mid last year.

March industrial output firmed by 11.9%, retail sales rose 15.2% and fixed asset investment, one of the principal drivers of China’s economy, grew 20.9% through the quarter. The numbers were good enough to see the MSCI Asia Pacific index gain by around 0.8% in early afternoon Tokyo trading. The Nikkei 225 was last trading up 1.3%, the Kospi and ASX200 both up 0.8%.

In regional corporate news, Insurance Australia Group announced it has increased its exposure to the Asian general insurance market by acquiring Kurnia Insurans through its AmG Insurance joint venture vehicle. The purchase price represents around A$480m of which Insurance Australia Group will contribute 49%.

For Insurance Australia Group, the move is part of a broader strategy to have 10% of gross written premiums generated outside of Australia by 2016 and follows on from ANZ and QBE’s recent plans to expand their regional Asian businesses. This all comes at a time when Singapore’s DBS is looking at adding capacity in Indonesia and CIMB beds down its recent RBS Asia asset purchase.

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