The ASX will take a step closer to retesting its record high this morning and ASX mining shares are likely to lead the charge!
The futures market is pricing around a 0.4% rise in the S&P/ASX 200 Index (Index:^AXJO) this morning.
You can thank the positive lead from Wall Street for this. But this will be overshadowed by China's record-breaking gross domestic product (GDP) figure.
China's record GDP reading
The Asian giant reported an eye-watering 18.3% surge in economic growth for the March quarter compared to the same time last year.
That is the largest GDP figure since China's National Bureau of Statistics (NBS) published the data in 1993.
The blistering pace of growth stands in contrast to the first quarter of 2020. That's when the COVID-19 outbreak caused China's GDP to collapse by 6.8%. That too set a record of its own, although not in a good way.
ASX shares best leveraged to China's growth
The remarkable turnaround is great news for ASX shares. This is particularly so for our miners who sell their commodities almost exclusively to China.
Iron ore heavyweights like the BHP Group Ltd (ASX: BHP) share price and Rio Tinto Limited (ASX: RIO) share price are expected to outpace the ASX200.
Copper producers like the OZ Minerals Limited (ASX: OZL) share price and Sandfire Resources Ltd (ASX: SFR) share price are also likely to join the party.
ASX oil shares to benefit too
I won't be surprised to see ASX energy shares getting a boost too. This includes the Santos Ltd (ASX: STO) share price and Oil Search Ltd (ASX: OSH) share price.
While ASX oil-exposed shares don't sell directly to China, crude prices could get some extra support as optimism towards global economic growth increases.
Black spots in China's GDP
But before you get too excited, some experts warn China's latest quarterly GDP figure is a lot worse than you might believe.
First off, the 18.3% figure was slightly below the median forecasts by economists polled by Bloomberg, reported the South China Morning Post.
Further, the March quarter 2021 growth rate is far less impressive when compared to the December quarter. The inflation and seasonally-adjusted GDP number increased 0.6% versus the last quarter.
That's well below the 3.2% quarter-on-quarter growth rate achieved in the last quarter of 2020. It seems that China's growth momentum is actually slowing!
But bullish ASX investors may not take notice.
