SYDNEY- Asian shares edged higher on Monday as Chinese economic data surprised on the high side, challenging wagers the economy was stuck in a downturn although a decline in mainland house prices was a worry.
Annual growth in retail sales and industrial output both handily beat forecasts, with the bounce in consumption a positive given pandemic restrictions.
On a negative note for the stressed housing market new home prices in China fell 0.2 percent month-on-month in October, the biggest decline since February 2015.
Economists at CBA argued there was a chance the People’s Bank of China would cut bank reserve requirements (RRR) this week to support activity.
“We estimate a 50 basis point cut to the RRR can release CNY 1 billion of liquidity,” they said in a note “In our view, mild easing measures can help meet funding requirements for property developers and offset downside risks to the economy.”
Chinese blue chips were steady on the data, while MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4 percent, after popping higher late last week.
Japan’s Nikkei gained 0.5 percent as data showing economic activity shrank by more than expected in the third quarter only reinforced the case for aggressive fiscal stimulus.
Elsewhere, the UN climate conference in Scotland managed to hammer out a deal on emissions, but only by watering down a commitment to phase out coal.
Wall Street eased last week to break a string of gains, though the major indices were only a shade off all-time highs. S&P 500 futures firmed 0.1 percent in early trade on Monday, while Nasdaq futures added 0.2 percent.
A key release this week will be US retail sales on Tuesday for any impact from the drop in consumer sentiment to a decade low reported for November as people fretted over higher prices, particularly for petrol.
