Markets in lull as investors watch for moves by China, shrug off upbeat US data

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TOKYO – Stock market trading was muted Friday in Asia as investors watched for moves by China to counter its economic slowdown.

Window dressing ahead of the fiscal year’s end helped Japanese shares rebound from early losses after the government reported household spending fell in February, suggesting consumer demand is not rising as much as expected ahead of an April 1 sales tax hike.

Japan’s Nikkei 225 stock index gained 0.4 per cent to close at 14,676.26. South Korea’s Kospi was almost unchanged at 1,978.82.

Expectations have been rising for more stimulus in China as growth has slowed to its weakest since the financial crisis.

With the focus on Asia, regional markets appeared to get little if any boost from figures suggesting a sustained recovery for the U.S. economy, which grew at a 2.6 per cent annualized rate in the October-December quarter, slightly more than previously estimated.

“Market sentiment is not too good,” said Linus Yip, a strategist at Shanghai Securities in Hong Kong, where small-cap Internet, environment and pharmaceutical shares could be headed for a correction, he said, given their relatively high valuations.

After a slow start, Hong Kong’s Hang Seng index rose 1.3 per cent by mid-afternoon to 22,116.19. The Shanghai Composite added 0.2 per cent to 2,049.82 as major banks reported profits in line with analysts’ forecasts.

Elsewhere in Asia, stocks rose in Singapore, New Zealand, Australia, Indonesia, India and Taiwan, but fell in Malaysia.

Wall Street looked poised for a good start, with Dow Jones Industrials futures and S&P futures both up 0.2 per cent.

In currency trading, the euro was steady at $1.3747. The dollar rose to 102.19 yen from 102.14 yen late Thursday.

A barrel of benchmark New York oil gained 32 cents to $101.60, compared to the previous close of $101.28, in electronic trading on the New York Mercantile Exchange.

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