Pedestrians walk past a share prices board in Tokyo. Japanese shares sank 1.11% yesterday as stronger yen hurt exporters.

AFP
Tokyo

A more than 20% dive in Chinese imports led to renewed worries about a growth slowdown in the world’s number two economy yesterday, hitting most Asian equities and emerging currencies as investors flocked to safe assets.
A more than week-long rally across regional markets came to an end as profit-takers moved in and worries about China resurfaced with the weak trade figures.
However, Shanghai ended the day on a high as the weak data fed hopes Beijing would use the latest report to unveil a fresh round of stimulus measures—having seen five interest rate cuts since November fail to provide any boost.
Adding to downward pressure across Asia was a sell-off in energy firms that was fuelled by a plunge in oil prices late Monday and the weak data from China, the world’s top energy user.
Comments from Federal Reserve officials suggesting the central bank will delay a US interest rate hike until next year were also unable to shore up confidence.
Yesterday China said imports fell 20.4% in dollar terms year-on-year during September as the nation’s property sector stuttered, leading to a knock-on effect for the crucial construction industry.
Exports slipped 3.7% owing to weak overseas demand.
In yuan terms imports fell 17.7% and exports dropped 1.1%.
The Asian giant is the world’s leading trader in goods but its slowing economic growth has seen prices plunge for the commodities it uses, fuelling turmoil through producer countries such as Australia.
A slew of data out of Beijing has raised a red flag about the economy, which is growing at around 7%, its slowest pace in a quarter of a century.
“Import growth remained sluggish, suggesting weakening domestic demand, particularly investment demand,” said Yang Zhao, China economist at Nomura Holdings in Hong Kong. “We maintain our view that GDP growth will decline to 6.7% in the third quarter.”
Shanghai moved in and out of negative territory through the day before ending 0.17% higher on speculation authorities will loosen the purse strings further.
“The data are not good but still acceptable to investors,” said Wu Kan, a Shanghai-based fund manager at JK Life Insurance. “As long as the data remain sluggish, the market will be anticipating growth-boosting measures from the government.”
However, other regional markets ended in the red, with profit-taking from a recent rally also playing a role.
Hong Kong lost 0.57% while Sydney—where several firms that rely on trade with China are listed—ended 0.57% down.
Tokyo sank 1.11% as a stronger yen hurt exporters, while Seoul closed 0.13% lower. Jakarta tumbled almost 3% and Manila was 1.9% lower by the end of the day.
World markets suffered their worst quarter for four years in July-September owing to fears about the effects of China’s growth slowdown as well as speculation the Fed would hike rates. A Chinese yuan devaluation in August sent shares into a sharp downward spiral.
But they have enjoyed a bumper October so far after the Fed indicated it could hold off a rise in borrowing costs because of the weak global economy.
However, Tim Schroeders, a portfolio manager at Pengana Capital in Melbourne, warned: “China’s weakening economy slowdown will continue to weigh on the market.
“We’ve had fairly significant lift in equities on speculation the Fed will delay raising rates. That’s now well priced into valuations.”
The risk-off mood weighed on emerging currencies, which have benefited this month from speculation the Fed will not raise rates.
In late trade, the Indonesian rupiah was 1.5% lower, while the Malaysian ringgit shed 0.87%. There were also big losses for the Australian dollar, which relies on resources exports to China.
On oil markets, both main contracts edged up after plunging more than 5% Monday on profit-taking and continuing concerns about a supply glut.
Prices had surged almost 10% this month, helped by comments from the Opec cartel that demand was seen picking up this year and next.
But while US benchmark West Texas Intermediate rose 1.13% to $47.63 and Brent climbed 1.12% to $50.42 a barrel, regional energy giants took a hit.
Sydney-listed Santos lost more than 6% and Origin was 5.4% lower. And in Hong Kong, CNOOC shed more than 3% while PetroChina was 2% lower. Inpex sank 3.4% and JX Holdings 1.3% in Tokyo.
Oil has rallied since hitting six-year lows in late August, with last week seeing healthy gains in line with global equities on waning expectations the US Federal Reserve will hike borrowing costs this year, pushing the dollar lower.