GLOBAL MARKETS-Upbeat Japan GDP brings some Asia cheer, but Nikkei misses out

Thu May 16, 2013 1:50am EDT

* Nikkei turns negative as momentum stalls

* Chinese and South Korean shares push higher

* Japan's Q1 growth beats forecasts

* Euro in doldrums after dour euro zone economic data

By Ian Chua

SYDNEY, May 16 (Reuters) - Most stock markets in Asia edged up on Thursday after solid growth data from Japan improved sentiment, although Tokyo's Nikkei lagged, while worries about a prolonged recession in the euro zone kept the common currency under pressure.

Financial spreadbetters expect Britain's FTSE 100 to open 1 to 3 points lower, Germany's DAX to open down 11 to 12 points, or as much as 0.1 percent, and France's CAC 40 to open 6 to 7 points lower, or as much as 0.2 percent.

U.S. stock futures were marginally weaker, pointing to a soft opening on Wall Street after the Dow and S&P 500 hit fresh record highs on Wednesday.

Mainland China stocks rose 1.4 percent and South Korean shares gained 0.8 percent, while MSCI's broadest index of Asia-Pacific shares outside Japan held steady.

"The market is turning around as optimism is growing that efforts by global governments including South Korea's to stimulate the economy will pay off," said Lee Jae-mahn, a market analyst at Tong Yang Securities.

The Nikkei, however, fell 1 percent after earlier hitting a fresh 5-1/2-year high. Still, it is up nearly 44 percent so far this year.

"The pace of the rise has been too fast. It's a healthy correction," said Norihiro Fujito, strategist at Mitsubishi UFJ Morgan Stanley Securities of the Nikkei.

Japan's economy grew 0.9 percent in the first quarter, the quickest pace in a year, beating expectations for a growth rate of 0.7 percent.

"This is undoubtedly very strong growth, and very positive for Japan's economy," said Yoshiki Shinke, senior economist, Dai-Ichi Life Research Institute in Tokyo.

"It's no longer just about brightening sentiment and rises in equities prices. There's now proof that Abenomics is working and that the economy is on a solid footing."

The report stood in stark contrast to the euro zone, which showed the region contracting for a sixth straight quarter as France slid into recession and Germany registered mere 0.1 percent growth.

The euro zone data had raised expectations for more monetary easing by the European Central Bank, prompting investors to sell the euro.

The euro slipped 0.1 percent to $1.2877, having hit a six-week low of $1.2843 on Wednesday. Against the yen, it was at 131.62, off a three-year peak of 132.78 set earlier in the week.

"The euro zone has registered six straight quarters of contraction and any recovery is likely to be limited in the months ahead," said Mitul Kotecha, global head of foreign exchange at Credit Agricole in Hong Kong.

"Pressure on the ECB to provide more policy accommodation will only be reinforced by today's release of the April CPI data leaving the euro under further pressure. Near term technical support for EUR/USD is seen around 1.2772."

Gold also struggled after a 2 percent slide in the previous session. Spot gold was around $1,395 an ounce, having briefly touched a fresh one-month low near $1,387.

Brent crude fell 0.4 percent to $103.22 a barrel, giving back some of Wednesday's 1.0-percent gain.

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