Markets mixed on weak China data

Asian markets were mixed yesterday as a surprise trade surplus from Japan was offset by more weak data out of China, adding to concerns over a slowdown in the world’s second largest economy.

The latest batch of downbeat news from Beijing initially sent shares into negative territory but most markets staged an afternoon rally, with bargain buying providing the impetus.

Tokyo closed 0.40 percent, or 40.59 points, higher at 10,127.08 and Sydney added 0.46 percent, or 19.4 points, to 4,273.7.

Japan yesterday said it had logged a trade surplus in February, largely thanks to a recovering auto industry and a tentative US recovery.

February’s surplus of 32.9 billion yen was the first in five months and beat forecasts of a 110 billion yen deficit, according to a poll by Dow Jones Newswires and the Nikkei business daily.

HONG KONG: Shares rose 0.22 percent yesterday, ending a four-session losing streak, but gains were capped by data from China showing manufacturing activity on the mainland contracted in March.
The Hang Seng Index added 44.93 points to 20,901.56 on turnover of HK$49.89 billion.

SINGAPORE: Shares fell 0.9 percent to close at their lowest level in more than a week, following weakness in European equity markets after data showed Germany’s manufacturing sector contracted in March for the first time this year. The benchmark Straits Times Index ended 0.89 percent lower at 2,979.25, an intra-day low.
Property developer Hongkong Land Holdings and commodity trading firm Noble Group Ltd were among the top losers on the index, as data showing China’s factory activity shrank renewed concerns about global growth

KUALA LUMPUR: Bursa Malaysia closed mixed yesterday, helped by information technology-related counters and the ease in worries about China’s economic outlook, dealers said.
The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) rose 0.71 point to close at 1,583.24.
Dr Nazri Khan, vice president, head of retail research of Affin Investment Bank, said the latest data on China’s industrial activities were not as bad as expected.

In other markets:

* Taipei added 0.98 percent, or 78.00 points, to 8,059.94.

Hon Hai rose 2.44 percent to Tw$105.0 while TSMC was 0.35 percent higher at NT$85.2.

* Manila closed 0.11 percent, or 5.58 points, up at 5,043.52.

Philippine Long Distance Telephone gained 0.23 percent to 2,600 pesos

* Wellington fell 0.21 percent, or 7.30 points, to 3,474.65.

* Jakarta rose 0.13 percent, or 5.33 points, at 4,041.56. Bank Rakyat rose 0.7 percent to 6,800 rupiah and car maker Astra jumped 0.8 percent to 72,200 rupiah.

* Bangkok fell 1.38 percent, or 16.67 points, to 1,191.00.

* Mumbai fell 2.30 percent, or 405.24 points, to 17,196.47.

EUROPE: European equities sold off for a fourth session yesterday, heading for their longest down run in four months as gloomy news from manufacturers in key economic powerhouses, China and Germany, cast doubts over the strength of global demand.

The pan-European FTSE Eurofirst 300 was down 1.0 percent to 1,080.69 points by 1126 GMT, extending its losses since the start of the week to 2.4 percent.

Elsewhere, the French CAC 40 was down 1.6 percent, while the German DAX, which has been the outperformer in Europe so far this year with a rise of 18 percent, fell 1.3 percent.

AMERICA: Signs that China’s economy is weakening and Europe is slowing sent U.S. stocks lower.

The price of crude oil dropped 2 percent Thursday to its lowest level in a week. That hurt oil stocks: Alpha Natural Resources, Consol Energy, and Noble Energy each fell 4 percent.

The disconcerting economic news from overseas overshadowed other reports that suggested the U.S. economy is gaining momentum.

The Dow Jones industrial average closed down 78.48 points, or 0.6 percent, at 13,046.14.

The Standard & Poor’s 500 index fell 10.11, or 0.7 percent, at 1,392.78, while the Nasdaq composite index fell 12 points, or 0.4 percent to 3,063.32.

Eight out of 10 sectors declined in the S&P 500, led by energy and materials as investors worried about a drop in global demand for oil and raw materials.

China has released a string of worrisome economic reports recently. The latest, on Thursday, signaled that its manufacturing sector could be contracting. A manufacturing index compiled by HSBC fell to 48.1 in March from 49.6 in February. Figures below 50 indicate that manufacturing is contracting.

That’s a negative sign because growth in China has played a key role in shoring up the global economy since the financial crisis of 2008.

China is also the world’s largest consumer of raw materials, so a slowdown there would affect those companies. US Steel Corp. tumbled 5.82 percent, and copper wire and bar manufacturer Freeport-McMoRan Copper Gold Inc. lost 3.7 percent.

It didn’t help that another survey in Europe also pointed to slower growth. The purchasing managers’ index from Markit, a financial information company, fell to a below-forecast 48.8 points in March from 49.3 a month earlier. The index combines both the services and manufacturing sectors in Europe.

Those signs of a deceleration in key global markets dwarfed the latest positive news on the U.S. economy. The number of Americans seeking unemployment benefits fell 5,000 to a four-year low last week, bolstering the view that the job market is strengthening. A measure of future U.S. economic activity, the Conference Board’s index of leading economic indicators, rose 0.7 percent in February for the fifth straight month, more evidence that the economy is gaining momentum.

The poor economic news from abroad also hurt FedEx Corp.’s stock, which fell 4 percent. Chief financial officer Alan Graf said the current global economic environment and higher fuel prices are driving more customers to “trade down” or choose slower methods of shipping to save money, just like they did during the recession. Investors decided to focus on his comments, rather than the company’s stellar performance. FedEx’s quarterly profit more than doubled between December and February after it shipped more packages and charged higher prices.

While news out of China has been bad for global company stocks, it may provide some relief to consumers with oil prices falling. Gasoline has risen 59 cents per gallon since Jan. 1 and the average price nationwide is above $4 in at least eight states, plus the District of Columbia.

It was a good day for IPOs. Payment processor Vantiv Inc. soared 14.7 percent in its first day of trading on the New York Stock Exchange, while email marketer ExactTarget Inc. rocketed up 32 percent on its first day of trading.

Benchmark Currency Rates
	USD 	EUR 	JPY 	GBP 	CHF 	CAD 	AUD 	HKD
USD	– 	1.3198 	0.0121 	1.5818 	1.0948 	1.0009 	1.0397 	0.1288
EUR	0.7576 	– 	0.0092 	1.1984 	0.8296 	0.7583 	0.7877 	0.0976
JPY	82.670 	109.100 – 	130.767 90.5120 82.7420 85.9640 10.647
GBP	0.6322 	0.8345 	0.0076 	– 	0.6922 	0.6327 	0.6573 	0.0814
CHF	0.9134 	1.2057 	0.0110 	1.4449 	– 	0.9142 	0.9497 	0.1176
CAD	0.9991 	1.3187 	0.0121 	1.5804 	1.0939 	– 	1.0388 	0.1287
AUD	0.9618 	1.2695 	0.0116 	1.5214 	1.0531 	0.9627 	– 	0.1239
HKD	7.7653 	10.2494 0.0939 	12.2829 8.5015 	7.7719 	8.0746 	–
                                                              Bloomberg

 

Category: FinanceAsia, Stocks