The analyst principally responsible for the production of this research report is: Howard Humphreys, Director & Lead Research Analyst, Seismic Research

Stocks rally amid bets of improving Chinese economy

Asian stocks rallied today, with the regional MSCI index heading for its third gain in four days as Chinese retailers rallied ahead of key economic data to be released this week. On Friday 18 January China will release its fourth quarter economic growth data, as well as figures for retail spending and industrial production in December. Chinese stocks are today heading for their biggest gain since 19 June last year. But today's gains come as questions are raised (once again) about the reliability of Chinese economic data.

On the local market, stocks pared gains after a report showed Australian home loan approvals unexpectedly dropped 0.5% in November, missing an expected 0.5% gain. ANZ also said that Australian job advertisements fell for a 10th month in December, the worst losing streak since the 2009 global recession. All eyes are now on the Australian jobs and unemployment report (due out this Thursday) to see if this weaker data continues. The Japanese stock market was closed today for a public holiday.

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(For a more comprehensive summary of last night's market action see FNArena's Overnight Report.)

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