HONG KONG (Reuters) - Asian stocks pulled back from six-month highs on Wednesday but held up after the drop on Wall Street overnight, with hopes for more Chinese stimulus spending helping offset reports of weak first-quarter growth.
Investors were cashing in on gains after many equity markets have jumped between 20 percent and 30 percent since early March, with Asian markets leading the charge higher as investors counted on China helping drive a regional growth pick-up, analysts said.
Higher-yielding currencies such as the Australian dollar relinquished some of their hefty gains in the past month after data showing a surprisingly big drop in U.S. retail sales last month highlighted the bumpy road to recovery in the recession-hit global economy.
But gains in safe-have government bonds were limited as investors fret about the wave of coming supply to fund government spending aimed at reviving growth, as well as signs that Asian central banks may have finished with their aggressive rate cuts.
The Shanghai Composite index -- the world's best performing market this year after being the hardest hit in 2008 -- held up the best, dipping just 0.5 percent.
A report on the Shanghai Securities News website said that Chinese annual economic growth, due to be released on Thursday, was between 6.0 percent and 6.8 percent in the January-March quarter, what would be the lowest on quarterly records going back to 1992.
Speculation has been rife in the past few days that China might announce a new package focused on boosting consumer spending on top of the $585 billion plan aimed at infrastructure spending.
"Investors are being more cautious, wanting to confirm quarterly results and outlook comments before making investment decisions," said Kim Joon-kie, a market analyst at SK Securities in Seoul.
The MSCI index of Asia-Pacific stocks outside Japan fell 1.1 percent, led by a drop in consumer discretionary and technology shares -- some of the biggest gainers in the rally.
On Tuesday the U.S. S&P 500 shed 2 percent, and S&P futures were pointing to further losses with a drop of 0.6 percent in Asia.
After the closing bell, Intel Corp said the worst was over for the battered tech sector but its shares tumbled after it failed to give a clear revenue forecast, citing the economic uncertainty.
U.S. corporate earnings season has kicked into high gear this week, stirring some caution among investors.
Japan's Nikkei average fell 0.8 percent, pulling further away from a three-month peak reached last week.
