San Francisco Frontiers - Asia markets react to China growth news

Chinese growth numbers for the first quarter of 2022 exceeded expectations on Monday but the government warned of "significant challenges" ahead.

Shanghai, the country's economic centre, is in the throes of an intense Covid-19 lockdown with restrictions -- which have also hit tech hub Shenzhen and the northeastern grain basket of Jilin -- shutting supply lines.

Investors were left weighing whether attempts to lift the economy by Chinese policymakers -- who have held off cutting interest rates -- would offset Beijing's zero-Covid policies.

"The unwillingness to loosen monetary policy further before Covid is under control means that market sentiment will probably remain bleak in coming weeks," the Gavekal Dragonomics team told Bloomberg.

"However, equities will rally even harder if lockdowns lift and policymakers start to make up for lost growth with additional easing measures."

Japan's Nikkei 225 made healthy gains in early trade with South Korea, mainland China, Taiwan, and Australia all edging upward.

But Hong Kong plummeted more than 2.5 percent in the first hour of trading after a four-day holiday hiatus.

The impact of monetary policy tightening in the United States to combat inflation was another variable watched closely by investors.

Meanwhile, oil prices continued to climb as Libya's National Oil Corporation announced the closure of operations in major sites after staff in the key export terminal of Zueitina and the Al-Sharara oil field were blocked from working.

Stephen Innes at SPI Asset Management said the rise in prices shows "just how bullishly reactive oil markets have become to supply shocks."

And the Japanese yen continued its drop against the dollar after crossing a new 20-year low Monday, reflecting the continued accommodation of Japanese monetary policy, while US policymakers move to hike interest rates.

- Key figures around 0230 GMT -

Tokyo - Nikkei 225: UP 0.20 percent at 26,854.87

Shanghai - Composite: UP 0.10 percent at 3,198.84

Hong Kong - Hang Seng Index: DOWN 2.72 percent at 20,933.13

Euro/dollar: DOWN at $1.0767 from $1.0802

Pound/dollar: DOWN at $1.2993 from $1.3023

Euro/pound: FLAT at 82.87 pence

Dollar/yen: UP at 127.77 yen from 126.54 yen

Brent North Sea crude: UP 0.36 percent at $113.55 per barrel

West Texas Intermediate: UP 0.14 percent at $108.36 per barrel

New York - Dow: DOWN 0.1 percent at 34,411.69 (close)

London - FTSE 100: Closed for a holiday

U.Lee--SFF