* China GDP rises 7.5 pct y/y, just above forecasts
* Dollar bulls hear a hawkish hint from Fed's Yellen
* Oil prices lowest since early April as supply worries ease
* Intel stock up more than 4 pct after beating estimates
By Wayne Cole
SYDNEY, July 16 Asian stocks held stubbornly
steady on Wednesday after China reported economic growth that
was just ahead of market expectations, drawing a sigh of relief
from investors rather than outright applause.
China's economy expanded by 2.0 percent in the second
quarter from the previous quarter, taking annual growth to 7.5
percent. Retail sales and industrial output were either in line
with forecasts or slightly higher.
The data confirmed the Asian giant had stabilised after a
shaky start to the year but still left the global outlook
cloudy, particularly given recent weakness in the euro zone.
"The GDP figure is in line with our expectation, but the
underlying momentum and recovery is still at a fragile state,
especially given the property market correction," said Chang
Jian, an analyst at Barclays based in Hong Kong.
"The recovery is quite dependent on the government support."
MSCI's broadest index of Asia-Pacific shares outside Japan
was down 0.2 percent while Japan's Nikkei
eased 0.1 percent.
Markets in China managed only a muted cheer and the Shanghai
index dipped 0.29 percent.
European investors seemed more impressed, with financial
spreadbetters expecting the FTSE 100, DAX and
CAC 40 to open 0.2 percent to 0.3 percent firmer.
Wall Street had provided scant direction after investors
gave a muddled reaction to testimony from Federal Reserve Chair
Yellen reiterated that the U.S. labour market was far from
healthy and signalled the Fed would keep monetary policy loose
until hiring and wage data show the effects of the financial
crisis are "completely gone".
Yet bond investors fixed on a comment that rates could rise
more quickly should the labour market continue to improve at a
rapid pace, and drove up short-term Treasury yields.
The latest U.S. economic news was generally upbeat as a
solid rise in core retail sales in June combining with upward
revisions to past months led analysts to nudge up estimates for
economic growth in the second quarter.
The Dow ended up a bare 0.03 percent, while the S&P
500 lost 0.19 percent and the Nasdaq 0.54
percent. High-flying social media and biotechnology shares took
a hit after the Fed singled out the valuation of the sector as
But there was some brighter news for the tech sector as
chipmaker Intel jumped more than 4 percent after
beating estimates. <ID:nL2N0PQ2A3>
JPMorgan Chase & Co and Goldman Sachs
outperformed after reporting strong results. JPMorgan finished
up 3.5 percent and was the biggest gainer on the Dow.
The contrast to Europe was stark as banking shares were
sideswiped when Portugal's Banco Espirito Santo slumped
17.5 percent to a fresh record low.
The euro took collateral damage and fell to its lowest in a
month at $1.3555.
The single currency also took a mauling from the pound,
which jumped when UK inflation surprised with a high reading,
stoking speculation for interest rates to rise this year.
Attention now is on UK unemployment figures due later
Wednesday where a strong report could lift the pound further.
The euro sank to a two-year trough at 79.08 pence,
while sterling made a six-year peak on the dollar at $1.7191
. The U.S. currency still managed to gain elsewhere and
its index edged up to a three-week high at 80.453.
A big mover in Asia was the New Zealand dollar, which slid
to $0.8700 after the country reported
In commodity markets, gold fell back to $1,298.50 an
ounce and further away from last week's peak at $1,345.
Oil prices managed a small bounce on Wednesday having struck
a three-month trough the day before. Prices have been falling
for three weeks now as traders shift their focus from violence
in Iraq and Libya to weak global fundamentals.
Brent futures edged up 8 cents to $106.10 a barrel,
having shed over a dollar on Tuesday. U.S. crude futures
recouped 46 cents to stand at $100.42 a barrel.
(Editing by Clarence Fernandez and Eric Meijer)