BANGKOK — Asian stock markets rose Wednesday as expectations that China will loosen its monetary policy to boost growth overcame nervousness sparked by mixed earnings reports from big U.S. banks.
Benchmark oil rose above $101 per barrel while the dollar fell against the euro and the yen.
Japan's Nikkei 225 index rose 1.4 percent to 8,579.80. Hong Kong's Hang Seng added 0.3 percent to 19,685.87. South Korea's Kospi was down 0.2 percent at 1,888.88 while Australia's S&P/ASX 200 was up 0.2 percent at 4,223.60.
Benchmarks in Singapore, Indonesia and Malaysia rose while mainland China and Taiwan fell.
Investors cheered news out of China on Tuesday when the government said its economy slowed less dramatically in the fourth quarter than feared — but still enough of a slowdown to persuade investors that Beijing will pursue a pro-growth monetary policy, analysts said.
"People have been buying stocks in anticipation of a relaxation in monetary policy by the Chinese government," said Derek Cheung, chief investment officer at Neutron INV Partners Ltd. in Hong Kong. "The market expects this around Chinese New Year. If China doesn't loosen around the new year, the market may come under pressure." The holiday begins Jan. 23.
China is one of the biggest importers and slower growth could have global repercussions if it cuts demand for iron ore, industrial components and other goods from Australia, Brazil, Southeast Asia and elsewhere.
It would also mean less demand for U.S. and European capital goods for Chinese factories and construction sites, and smaller profits for U.S. and European companies that do business here. The luxury goods industry would also feel a significant pinch, since China is just about the only growth market for those.
Commodities shares jumped on the growth data out of China. Australian miners Fortescue Metals Group jumped 5 percent and Rio Tinto Ltd. added 1.5 percent after both companies reported target-beating production figures Tuesday.
But some financial shares came under pressure on weak quarterly earnings from some U.S. banks, including Citigroup Inc., which said its fourth-quarter income fell 11 percent due in part to lower investment banking income and an accounting charge.
Australia & New Zealand Banking Group fell 1.1 percent and Hong Kong-listed Agricultural Bank of China also lost 1.1 percent.
South Korean high-tech shares also slumped. Samsung Electronics Co., the top global manufacturer of flat screen televisions, memory chips and liquid crystal displays, fell 0.9 percent. LG Electronics shed 1.8 percent, and Hynix Semiconductor was 1.2 percent lower.
European shares ended mostly higher Tuesday on the heels of short-term debt auctions by Spain, Greece and Europe's bailout fund that drew strong investor demand, despite recent credit rating downgrades by Standard & Poor's.
Many had feared the downgrades would prevent them from obtaining funds and worsen a sovereign debt crisis in Europe.
On Tuesday, the Dow Jones industrial average rose 0.5 percent to close at 12,482.07. The Standard & Poor's 500 index gained 0.4 percent to 1,293.67. The Nasdaq composite index added 0.6 percent to 2,728.08.
Benchmark crude for February delivery was up 66 cents to $101.37 per barrel in electronic trading on the New York Mercantile Exchange. The contract finished at $100.71 per barrel in New York on Tuesday.
In currency trading, the euro rose to $1.2779 from $1.2722 late Tuesday in New York. The dollar fell to 76.65 yen from 76.82 yen.