Asia: Shares mixed as traders weigh G-20 growth pledge

[HONG KONG] Asian stocks were mixed on Monday, with most bourses taking heart from a G-20 pledge to boost global growth while Chinese shares slumped to a 15-month low after the meeting wrapped up in Shanghai.

European and Asian equities rose in the previous session, as hopes grew the world's top 20 economies would agree to unleash their monetary firepower to stimulate the sagging world economy at the two-day meeting.

But optimism fizzled by the end of US trading, with stocks and oil finishing on a hesitant note after better than expected GDP data raised questions over the Federal Reserve's approach to interest rates.

Sentiment was mixed in Asia on Monday, with Tokyo rising led by carmaker Nissan, which surged the most in seven years after it pledged to buy back US$3.5 billion of its shares this year.

Oil rose in early trading, with the US benchmark adding 8 cents, or 0.24 per cent, to US$32.86 and Brent crude up 24 cents, or 0.68 per cent, to US$35.34 at around 0130 GMT.

Chinese shares tumbled more than three per cent, however, to their lowest point since November 2014 as traders remained unconvinced the G20 had promised enough to boost stalling global growth.

News the yuan currency weakened for a seventh day added to concerns, after the head of the central bank briefly soothed markets by saying there was "no basis" for it to keep falling.

"The G20 is saying all the right things, so the comments may be seen as soothing by financial markets," Shane Oliver, head of investment strategy at fund manager AMP Capital Investors, told Bloomberg News.

"But I am not convinced that it means a lot more coordinated policy stimulus is about to follow." Pressure has been mounting for central bankers to do more to stimulate growth and reassure investors after financial markets posted one of the worst starts to the year in living memory.

Equities, commodities and emerging market currencies have been hit hard as concerns about slowing growth in number two economy China and a slide in oil prices hurt sentiment around the world.

G20 ministers on Saturday said the group "will use all policy tools - monetary, fiscal and structural - individually and collectively" to build confidence and strengthen the recovery.

But analysts were unimpressed they had failed to agree a group-wide strategy to tackle the growth at the meeting in Shanghai, after divisions emerged over the best way to stimulate their economies.

News the US economy grew faster than expected in the fourth quarter of 2015, despite the turmoil gripping world financial markets, boosted the dollar which held on to most of its gains in Asian trading.

The economy expanded by one per cent in the final quarter of the year, the Commerce Department said Friday, surprising analysts by revising up its previous estimate of 0.7 per cent.

Analysts said the strong data could provide more support for the US central bank to hike interest rates again this year, despite the global slowdown.

"Markets look set for a volatile week as a raft of data releases globally set markets up for a dramatic reweighting of growth expectations," said Angus Nicholson, a market analyst at IG in Melbourne.

"The biggest story of the moment has been the far better performance of US data than the market had expected, which is seeing US dollar strength return." AFP