China rebound, other Asian markets mostly gain after strong US growth data

EnergyAssociated Press

China's stock market rebounded while other Asian stocks also mostly gained Friday after data showed the U.S. economy posted solid growth during the second quarter.

KEEPING SCORE: The Shanghai Composite Index gained 0.2 percent to 3,713.54, bouncing back for the first time in two days. South Korea's Kospi finished up 0.2 percent at 2,023.63. Japan's Nikkei 225 added 0.2 percent to 20,557.96 while Hong Kong's Hang Seng index rose 0.5 percent to 24,618.67. Stocks in Australia and New Zealand were higher as well as most stocks in Southeast Asia.

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CHINA'S SWING: The Shanghai benchmark reversed its loss and made a rebound for the first time in two trading sessions. The index suffered its biggest one-day drop in eight years on Monday when it plunged 8.5 percent despite government intervention to halt a slide in stock prices. Stocks recovered moderately on Wednesday before falling again on Thursday. Analysts say the volatility is a sign that economic fundamentals cannot support stock prices at their current levels.

ANALYST'S TAKE: "Chinese markets should continue to grind sideways in the coming sessions, as some calm returned to the market," said Bernard Aw, a market strategist at IG. "(Thursday's) decline is expected to be tolerated by the authorities, but we could still see state fund bids cushioning the downside."

US ECONOMY: Driven by strong consumer spending, the U.S. economy expanded 2.3 percent in the April-June quarter, the best showing since last summer. First-quarter growth was revised to 0.6 percent growth from an earlier government estimate of a contraction. The data underscored the steady growth that is likely to bolster the Federal Reserve's case that it will soon be time to raise rates from a record low. Fed policymakers voted Wednesday to leave interest rates unchanged. Many investors expect the Fed will lift rates in September or December.

WALL STREET: U.S. stocks closed nearly unchanged on Thursday. The Dow Jones industrial average lost 5.41 points, less than 0.1 percent, to end at 17,745.98. The Standard & Poor's 500 index closed effectively unchanged, up 0.06 of a point at 2,108.63. The Nasdaq composite rose 17.05 points, or 0.3 percent, to 5,128.78.

OIL: Benchmark U.S. crude lost 38 cents to $48.14 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 27 cents to close at $48.52 a barrel on Thursday. Brent crude, a benchmark for international oils used by many U.S. refineries, fell 41 cents at $52.90 a barrel in London.

CURRENCIES: The dollar fell 0.1 percent to 124.05 yen and the euro edged up 0.1 percent to $1.0953.