China economic figures in spotlight

All eyes will be on China this afternoon as the world's second-biggest economy releases economic data that could calm or exacerbate volatility in jittery financial markets.

Markets across Asia made a nervous start to the week yesterday, with the S&P/NZX 50 falling 1.1 per cent in thin trading to close at 6101.44 last night.

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It recovered during afternoon trading after being down 2.2 per cent at one point - its steepest intraday fall since August 25 and the third biggest in the past four years.

Global equity markets have had their worst ever start to a year thanks to ongoing fears about the health of China's economy and a slump in oil prices that saw Brent crude briefly dip below US$28 a barrel yesterday for the first time since 2003.

Gordon Kwan, a Hong Kong-based analyst with Nomura, told Bloomberg additional crude shipments resulting from a lifting of Iranian sanctions could potentially depress prices oil prices to as low as US$25 a barrel.

China will release its annual and fourth-quarter gross domestic product (GDP) data at 3pm (NZ time).

Market expectations are for 6.9 per cent growth in both cases, according to Bloomberg.

Beijing will also today release reports on industrial production, retail sales and fixed asset investment.

"That GDP statistic will be one piece of the puzzle that investors will spend a lot of time looking at," said Harbour Asset Management portfolio manager Shane Solly.

China's Shanghai Composite Index closed up 0.4 per cent yesterday. Hong Kong's Hang Seng Japan's Nikkei both shed around 1 per cent.

Nervousness about the Chinese Government's ability to successfully rebalance China's economy towards domestic consumption away from industrial and investment-led growth contributed to major Wall Street sell-off on Friday, which the New Zealand market reacted to yesterday.

Australia's S&P/ASX 200 fared a little better, closing down 0.7 per cent last night, partly helped by share price rallies from retailers Woolworths and Wesfarmers.

Mark Lister, head of private wealth research at Craigs Investment Partners, said the NZX 50 - which has fallen 3.5 per cent this year, compared with the ASX 200's roughly 8 per cent - was "catching up" with its peers yesterday.

"I think our market deserves to have held up better than others, but probably not quite as much as it has," Lister said.

Wall Street's S&P 500 has fallen 8 per cent this year. US markets were closed for a public holiday.

JBWere investment strategist Bernard Doyle said there was concern in equity markets that the oil price slump reflected problems in the global economy, particularly China, a major consumer of the commodity.

"Our view is that cheap oil prices are fundamentally good, particularly for consumers," Doyle said. "They're obviously not good for oil producers, but there's more consumers than producers."

Current oil prices, and the possibility of them weakening even further, reflected "strong supply growth and modest demand growth", he added.

Solly said the New Zealand sharemarket had held up remarkably well in the face of global volatility.

"Our economy and our market are relatively less impacted by the things going on."