Asian markets mostly fell yesterday, with investors cashing in after enjoying their best rally so far this year, as China released data showing another hefty slump in exports.
In Tokyo, the Nikkei 225 down 0.8% at 16,783.15 points; Shanghai – composite up 0.1% at 2,901.39 points and Hong Kong - Hang Seng down 0.7% at 20,011.58 points at the close yesterday.
Profit-takers made the most of the latest surge in prices that has come on the back of upbeat US data and hopes that China will take further steps to kick start the world’s number-two economy. China’s exports dived more than a quarter on-year in February, new data showed yesterday, while imports were almost 14% off—far worse than analysts forecast.
The numbers are the latest to highlight weakness in the economy, although officials pointed out that they were skewed by the Chinese New Year holiday that saw factories shut down for a week.
However, Frederic Neumann, co-head of Asian economic research at HSBC Holdings in Hong Kong, said: “Exports got pummelled again in February, highlighting the downturn in global demand.
“It’s easy to blame Chinese New Year distortions, but there is a much deeper malaise that is becoming apparent in the numbers.”
Shanghai stocks, which slumped more than 2% at one point, ended 0.1% higher while Hong Kong ended 0.7% down.
The Chinese customs data was released as the nation’s leaders hold their annual policy gathering, which started Saturday with Premier Li Keqiang targeting 6.5 to 7% economic growth this year.
The lower and wider band indicates leaders accept the tough work ahead as they look to recalibrate the giant economy from one dependent on exports and investment to domestic-driven growth.
In Japan, adjusted figures showed the world’s number-three economy contracted slightly less than first thought in the final three months of 2015. But the tweak was scant consolation for Prime Minister Shinzo Abe, whose big-spending, loose monetary policy blitz to reinvigorate the economy has been called into question by a series of disappointing readings.
“We cannot take a positive view (on the revised data)... There is no change to our outlook that the economy is stagnant,” said Junichi Makino, chief economist at SMBC Nikko Securities.
The news will put fresh focus on the Bank of Japan when it meets next week, with expectations it will further loosen monetary policy.
Despite the prospect of fresh cash being pumped into the financial system the yen ticked higher against the dollar. The greenback bought ¥112.99 in afternoon trade, against ¥113.41 in New York.
That hit exporters on the Nikkei index, which ended down 0.8%. “We might be experiencing a bit of exuberance,” Michael McCarthy, chief market strategist at CMC Markets Asia Pacific in Sydney, told Bloomberg News.
“Japanese markets have gone up significantly, making it vulnerable for a correction.
The GDP has acted as a trigger for the selloff in Tokyo.” Other regional markets were also in negative territory, with Sydney off 0.7% by the close and Seoul down 0.6%.