China's GDP offsets losses as Asian equities slump over concerns about US interest rates

Tuesday's steep decline in Asian markets followed Wall Street's overnight sell-off due to ongoing worries about Middle East geopolitical unrest and rising, longer-term U.S. interest rates.

However, compared to their counterparts, Chinese stock losses were comparatively smaller, as figures from the GDP indicated that the nation's economy expanded faster than anticipated in the first quarter.

Nevertheless, the general attitude remained risk-averse, particularly in light of the fact that better-than-expected U.S. retail sales data stoked concerns about sticky inflation and higher-for-longer interest rates. Monday's steep decline in Wall Street indices coincided with a little decline in U.S. stock index futures during Asian trading.

The data released on Tuesday indicated that thanks to ongoing stimulus and modest gains in consumer spending, the Chinese economy was on pace to fulfil the government's 5% annual GDP objective.

However, more statistics revealed that the Chinese economy could be losing steam. Both retail sales and industrial production in March climbed less than anticipated.

That said, Chinese equities had rebounded from January's five-year lows and were resting on modest gains during the previous two months. In a recent report, Goldman Sachs analysts stated that they anticipated further growth, but only in specific industries.

For more hints about interest rates, attention was now focused on a speech that Federal Reserve Chair Jerome Powell was scheduled to give later on Tuesday.

The speech follows several higher-than-expected inflation figures from the previous week. The best part of this was reinforced on Monday by better-than-expected U.S. retail sales figures, which further reduced expectations for inflation.

Due to this pattern, traders priced out expectations that the Fed would start lowering interest rates in June forcefully, which will put sustained pressure on rates on the stock market in the upcoming months.

(Sources: investing.com, reuters.com)