Chinese markets. Picture: AFP/FRED DUFOUR
Chinese markets. Picture: AFP/FRED DUFOUR

Tokyo — Asian stocks rose modestly on Tuesday following data showing China’s economy grew a little faster than expected in the first quarter.

The dollar was barely changed, with demand for safe-haven US treasuries ebbing as investor risk appetite improved in parts of the broader markets as investors took the view that Western-led strikes on Syria were a one-off intervention.

China’s economy grew a welcome 6.8% in the first quarter of 2018 from a year earlier, official data showed on Tuesday, unchanged from the previous quarter.

But separate data showed March industrial output missed expectations and first-quarter fixed-asset investment growth slowed, tempering equity market gains.

MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.05%. Australian stocks gained 0.5%, South Korea’s Kospi dipped 0.1% and Hong Kong’s Hang Seng gained 0.15%. Shanghai rose 0.15% and Japan’s Nikkei was flat.

While Saturday’s missile strikes were the biggest intervention by Western countries against Syria, investor risk appetite improved on speculation that the attacks would not lead to prolonged conflict.

"The markets had been bracing for a possible escalation in Syria following President Trump’s earlier warnings. Military action, however, has been limited, bringing relief," said Kota Hirayama, senior emerging markets economist at SMBC Nikko Securities in Tokyo.

"That said, the underlying picture has not changed. Conflict continues in Syria and trade issues remain unresolved. Geopolitics will impact the markets again."

The Dow gained 0.87% and the S&P 500 rose 0.8% on Monday, with the biggest boosts from technology and healthcare sectors as investors were optimistic about the earnings season and appeared less worried about US-led missile attacks in Syria.

S&P 500 companies are expected to report an 18.6% jump in first-quarter profit, on average, the biggest rise in seven years, according to Thomson Reuters data.

The dollar index against a basket of six major currencies was little changed at 89.441 after losing 0.4% overnight.

The euro was steady at $1.2377. The dollar was effectively flat at ¥107.060. The pound rose to $1.4355, its highest since June 2016, with focus on data that could cement expectations of a May interest rate increase from the Bank of England (BoE).

The Hong Kong Monetary Authority (HKMA) stepped into the currency market again on Tuesday, buying HK$5.77bn ($735m) in Hong Kong dollars as the local currency repeatedly hit the lower end of its allowable trading band.

The 10-year US treasury note yield was at 2.834% after rising to 2.865 on Monday, its highest since March 22.

US crude oil futures rose 0.4% to $66.49 a barrel after tumbling nearly 1.8% overnight as the concern over tension in the Middle East waned.

Brent crude climbed 0.3% to $71.61 a barrel.

Reuters