In This Article:
* MSCI Asia ex-Japan +0.1 pct
* S&P 500 at record closing high after faster U.S. growth
* Investors eye U.S. Federal Open Market Committee meeting this week
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Andrew Galbraith
SHANGHAI, April 29 (Reuters) - Asian stock markets edged up on Monday after surprising strong U.S. first-quarter economic growth boosted the S&P 500 index to a record high, but gains were capped by caution over less upbeat aspects in the GDP report which pointed to some weakening ahead.
Investors were also awaiting a meeting of the U.S. Federal Reserve this week and Chinese factory data for further clues on policy direction in the world's biggest economies.
MSCI's broadest index of Asia-Pacific shares outside Japan was up less than 0.1 percent, edging higher after posting its biggest weekly drop in more than a month last week.
Australian shares were down 0.26 percent, while Seoul's KOSPI was up 0.4 percent.
Japan's financial markets are closed for a long national holiday this week, but Nikkei 225 futures in Singapore were 0.72 percent higher.
In contrast with weakness in Asian markets last week, Wall Street ended Friday on a high note following data showing U.S. gross domestic product grew at a faster 3.2 percent annualised rate in the first quarter.
The Dow Jones Industrial Average rose 0.31 percent to 26,543.33 and the Nasdaq Composite added or 0.34 percent to 8,146.40.
The S&P 500 gained 0.47 percent to 2,939.88, its second record closing high for the week.
Stephen Innes, managing partner at SPI Asset Management, said that despite stronger-than-expected earnings helping to lift markets, he sees "overly extended" S&P positioning.
"We have flipped from a state where it is a stock rally no one wants to take part in, to a frenzied paced splurge where hedge funds and investors alike continue to chase markets like greyhounds to the mechanical rabbit," he said in a note.
While the strong GDP data helped to ease fears of an imminent recession, investors noted that it was driven by a smaller trade deficit and a large accumulation of unsold merchandise, as consumer and business spending slowed sharply.
In a morning note to clients, analysts at National Australian said the strong GDP has a "soft underbelly", noting weak inflation.
"It is the thought that a downturn in inflation could have the Fed cutting rates before 2019 is out – at a time when the Fed is openly discussing wanting to tolerate a period of above target inflation to make up for past shortfalls – that had the interest rate markets moving the implied probability of a 2019 easing out," they said.