Asia: Stocks higher driven by better-than-expected Chinese economic growth

Asian stocks were higher on Tuesday ahead of policy meetings and following news that China’s economy expanded more than expected in 2014.

Shanghai rose 1.82% after a 7.7% decline on Monday due to a margin lending crackdown.

The jump in Chinese stocks was driven by gross domestic product (GDP) growth of 7.3% year-on-year in the fourth quarter, beating expectations of 7.2%. However, this was the slowest economic growth in 24 years.

Berenberg economist Robert Wood said: “Despite all the hand wringing, China continues to grow rapidly, if slower than the 10%-plus rates seen before 2010.”

Experts at Danske Bank expect the Chinese government to cut its GDP growth target to 7% for 2015.

“Hence, there is no imminent pressure on People’s Bank of China to ease substantially,” they said.

Industrial production also came better-than-expected at 7.9% year-on-year in December from 7.2% the month before. Forecasts expected an increase of 7.4%.

Retail sales improved in December to 11.9% from 11.7% the month before.

Nikkei 225 was up 2.07% driven by a weaker yen against the dollar ahead of the first day of a policy meeting at the Bank of Japan. The yen fell 0.8% to 118.53 against the dollar.

Japanese stocks were also helped by projections that the European Central Bank will introduce full-blown quantitative easing to address the weak economy and deflation on Thursday.