Asian markets jumped on Tuesday, with commodity-linked stocks particularly upbeat, after news that fourth-quarter economic growth in China had beaten forecasts eased fears of a sharper slowdown there.
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Mainland Chinese stocks, after dropping for the past four trading days, were the best performers, with the Shanghai Composite jumping 4.2% to 2298.38 and the Shenzhen Composite hopping 5.1% to 860.25.
Their performance, following an advance Monday for European stocks after a successful French debt auction, also inspired gains in other markets in the region. Hong Kong's Hang Seng Index gained 3.2% to 19627.75, Japan's Nikkei Stock Average climbed 1.1% to 8466.40 and Australia's S&P/ASX 200 index added 1.7% to 4215.6.
South Korea's Kospi rose 1.8% to 1892.74 and Taiwan's Taiex added 1.7% to 7221.08.
"Given the euro-zone crisis has thus far been a slow-bleeding process—unlike the sudden collapse of the U.S. financial crisis—China's hard-landing risks are not imminent," said Alistair Thornton at IHS Global Insight.
Data out Tuesday showed the world's second largest economy grew at a faster pace than expected in the fourth quarter, with output up 8.9% from the year-earlier period. The growth was weaker than in the July-September quarter, but better than economists' expectations, and helped soothe fears that Europe's debt-related problems would slow the Chinese economy. Other key China data, including retail sales and industrial output, also beat estimates.
The stronger-than-expected growth tempered expectations of an imminent reduction by Beijing in banks' reserve requirement ratios.
"Markets are rebounding after overreacting to the [S&P] European credit downgrades on Monday," said Linus Yip, strategist at First Shanghai Securities in Hong Kong. "People are still expecting more monetary easing, but we have to see the economy [slowing]. Right now, the better-than-expected GDP figure means the timing for the next easing measures may be a little delayed."
Commodity-linked stocks were notable gainers across Asia, with Aluminum Corp. of China and Jiangxi Copper jumping by the day's limit of about 10% in Shanghai. In Hong Kong, they rose 8.1% and 9.3%, respectively.
In Sydney, OneSteel jumped 7.8%, while Fortescue Metals Group—which reported a 19% rise in iron-ore shipments for the December quarter—added 3.9%.
Rio Tinto, which reported record global iron-ore production, added 1.3%.
The region's shippers added to recent gains. Daewoo Shipbuilding & Marine Engineering climbed 5.4% in Seoul and Mitsui O.S.K. Lines rose 2% in Tokyo. China Cosco Holdings surged 10% in Shanghai as well as Hong Kong.
Exporters were among notable gainers in Japan, as the euro appreciated against the yen. Pioneer rose 2.4% while Nissan Motor and NEC each firmed up 1.9%.
U.S. markets were closed Monday for Martin Luther King Jr. day.
Financial stocks also rose across the region, despite Standard & Poor's downgrade Monday of the European Financial Stability Facility—the euro-zone bailout fund—by one notch to double-A-plus.
Ric Spooner chief market analyst at CMC Markets in Sydney, said the downgrade was "unlikely to have a major impact on risk premiums since its funding requirements are largely covered until the middle of the year."
Hong Kong-listed banks also pushed higher, with index heavyweight HSBC Holdings adding 3.3% and Agricultural Bank of China climbing 4.7%. In Seoul, KB Financial Group Inc. rose 5.3%.
In Tokyo, Sumitomo Mitsui Financial Group put on 1.2% amid reports the company will buy Royal Bank of Scotland Group's aviation unit for as much as $7.2 billion.
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