ASIA MARKETS: Asia Stocks Mostly Higher After China Data

By Laura He and Michael Kitchen, MarketWatch

HONG KONG (MarketWatch) -- Asia stocks were mostly higher on Tuesday, tracking overnight gains in the U.S., while Shanghai markets slipped as China's April economic data slightly missed expectations.

Japanese stocks led regional gains, with the Nikkei Average closing up 2%, and the Topix index finishing 1.8% higher. The yen (USDJPY) weakened against the dollar, trading at Yen102.298 from Yen102.218 on Monday. Australia's S&P/ASX200 ended up 0.9%, and Hong Kong's Hang Seng Index logged a gain of 0.4% at the close. However, the Shanghai Composite Index dipped 0.1%.

China on Tuesday released a set of economic data, including April's retail sales and industrial output, both of which were slightly below market forecasts. (Read more in the Asia Stocks live blog: http://blogs.marketwatch.com/thetell/2014/05/12/asia-stocks-live-blog-rallying-into-china-data/?mod=MW_story_latest_news.)

Among the major movers in Japan, electronics giant Sharp Corp. jumped 5%, auto maker Nissan Motor climbed 5.1%, and rival Honda Motor advanced 3.5%.

In Hong Kong, leading Chinese property developer Country Garden Holdings shot up 6.5%, rival Poly Property Group pushed 4% higher, and state oil giant PetroChina tacked on 2.8%.

China factory output, retail sales below forecasts

China's industrial production slowed to 8.7% in April from a year earlier, compared to 8.8% in March, while retail-sales growth also eased to 11.9% from 12.2% in March, the National Bureau of Statistics said Tuesday.

Both data slightly missed forecasts, as markets expected the factory output to expand 8.9% and retail sales to increase 12.2% during the period, according to a Wall Street Journal poll of economists.

Among other data, urban fixed-asset investment (FAI) rose 17.3% for the first four months of year, down 0.3 percentage points from the January-to-March period.

In a Tuesday note ahead of the data release, analysts from Credit Agricole said the results might confirm softness in the Chinese economy, as government stimulus measures announced earlier this year need time to show up in hard data.

The Chinese markets showed little reaction immediately after the release. Hong Kong's Hang Seng Index held its 0.3% gain, while the Shanghai Composite Index lost 0.3%.

However, the Australian dollar (AUDUSD) , which is often sensitive to economic news from China, fell to 93.37 U.S. cents from 93.48 U.S. cents seen ahead of the data release. On Monday, the Aussie was buying 93.59 U.S. cents.

In India, the benchmark Sensex index hit a record high in early trading after major exit polls Monday evening indicated Narendra Modi -- considered a business-friendly candidate -- would win the general election and become India's next prime minister.

Comments on China

In some fresh commentary out today, MarketWatch looks at whether Hong Kong is turning into a mini-Shanghai, and just how serious the Chinese Communist Party is about reform.

In his weekly column, Craig Stephen looks at some recent regulatory moves in Hong Kong and wonders if the city is set to exchange its traditional "tycoon crony capitalism" model for a mainland Chinese "state-run monopoly" system.

Then, Satyajit Das writes that China's ruling party is standing in the way of its own reform efforts. Das points to "increasing repression and intolerance" as evidence that change in China will be a long process.

More MarketWatch news:

Asia Stocks blog: Rallying into China data

China's capital-market reform: What it means

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