* China growth, inflation quicken, more c.bank moves likely
* Most Asian shares weak, China data caps gains in Japan
* Dollar surges to four-month high against currency basket
* Euro falls to five-month low but recovers later
By Raju Gopalakrishnan
SINGAPORE, Jan 21 (Reuters) - Most Asian stock markets fell
on Thursday as investors worried that China would take more
measures to temper growth after reporting its fastest quarterly
growth in two years.
But European shares <> were expected to open higher
as traders said a sell-off on Wednesday, sparked by fears of a
clampdown on Chinese bank lending, may have been overdone.
The dollar surged to a four-month high against a basket of
currencies <.DXY> as the euro <EUR=> fell. Possible tightening
in China also drove investors to sell currencies leveraged to
global growth, like the Australian, New Zealand and Canadian
dollars.
The yen <JPY=> was holding steady about 0.4 percent up on
the day.
China's fourth quarter gross domestic product was up 10.7
percent compared with a year earlier, below market expectations
of 10.9 percent but up sharply from 9.1 percent in the third
quarter.
"Obviously the month-on-month growth momentum is very
strong," said Xing Ziqiang, an economist at CICC in Beijing.
"So I think the chances for us to see an interest rate rise in
the first quarter are increasing." []
Some investors fear China's moves could impede a still-weak
global economic recovery and curb its insatiable demand for
commodities and other imported goods. But most economists agree
that gradual and modest tightening moves by the Chinese central
bank would do little to rob the economy of its strong momentum.
China's economic growth is expected to accelerate to 9.5
percent this year even if there are one or two rate rises,
according to a Reuters poll of economists published on
Thursday. The economy grew 8.7 percent in 2009.
[]
"It's not tightening yet, but the market tends to
sensitively react to any signs of tightening policy at an early
stage," said Masaru Hamasaki, senior strategist at Toyota Asset
Management in Tokyo. "We're still in that very precarious
place.
"But once we pass this phase, investors will likely shift
their focus to the strength in the economy and expectations for
solid earnings."
The MSCI Asia-Pacific index excluding Japan eased 0.62
percent <.MIAPJ0000PUS>, while the Thomson Reuters index of
regional shares <.TRXFLDAXPU> lost 0.52 percent.
Japan's Nikkei index <> gained about 1.2 percent on a
stabilising yen and positive sentiment for tech stocks,
although the gains were capped by China-related caution. []
"It's not anything specific, just putting together bits of
things -- recent brokerage upgrades of tech companies, U.S.
tech results, higher prices for chips," said Hiroaki Osakabe, a
fund manager at Chibagin Asset Management.
TDK <6762.T>, which makes parts for hard disk drives,
jumped 4.8 percent to 6,070 yen after Citigroup raised its
rating on the company to "buy/high risk", partly citing strong
demand for personal computers and low hard drive inventory
levels.
Tech shares also led the charge in South Korea with LG
Display <034220.KS>, the world's No. 2 LCD panel maker, and
Hynix Semiconductor <000660.KS>, the world's No. 2 memory chip
maker, surging on positive outlooks for the first quarter.
The overall KOSPI index <> closed 0.45 percent up.
[]
Shanghai shares <> ended slightly higher, rebounding
from a near three percent fall on Wednesday that took it close
to its 125-day moving average, a key support. But Hong Kong's
Hang Seng index <> fell 1.3 percent on worries about
China's future policy actions, particularly any fresh measures
it may announce to cool its soaring property market.
Stock markets also fell in India and across most of
Southeast Asia.
Copper, which is seen as an indicator of Chinese growth
because of its wide use in industry, fell nearly 1 percent in
Shanghai on the data. []
"I think it's bad news for base metals, and copper in
particular. Fixed asset investment is lower, and inflation
higher, which basically means demand is down and inflation is
up," said a trader based in Singapore.
"Rate hiking and currency appreciation have to come
quicker."
In the bond market, Japanese government bonds held steady
after strong demand for a 1.1 trillion yen ($12.06 billion)
20-year debt auction due. []
The yield on the 20-year bond <JP20YTN=JBTC> was mostly
steady at 2.135 percent. The benchmark U.S. Treasury note yield
<US10YT=RR> fell to a one-month trough on Wednesday on a lower
Wall Street and concerns over Greece's fiscal troubles.
Gold <XAU=> and crude oil <CLc1> edged higher to $1,114.10
per ounce and $78 a barrel, respectively.
(Editing by Kim Coghill)
