Asian shares mixed as China reports economy slowed in 2Q

16-Jul-2019 Intellasia | AP | 6:02 AM Print This Post

Shares were mixed Monday in Asia, led by gains in Chinese markets after the government reported that the economy grew at the slowest pace in a decade in the last quarter.

Analysts said the 6.2 percent annual rate of growth reported for April-June suggests the trade war between the US and China is hammering industries.

The Shanghai Composite index gained 0.8 percent to 2,952.85 while Hong Kong’s Hang Seng index gained 0.2 percent to 28,532.85. Australia’s S&P ASX 200 fell 0.3 percent to 6,673.60 and in South Korea, the Kospi edged 0.1 percent lower to 2,084.40. India’s Sensex climbed 0.5 percent to 38,912.85, while shares fell in Taiwan and Singapore. Japan’s markets were closed for a national holiday.

The growth data for China was the weakest since the first quarter of 2009, in the aftermath of the global financial crisis.

Tariff hikes by President Donald Trump have battered Chinese as well as US exporters, and Chinese leaders have increased spending and loosened controls on bank lending to keep growth within this year’s range of 6 percent to 6.5 percent.

Trump and Chinese President Xi Jinping agreed in late June to restart talks on their stand-off over the longstanding US trade deficit and Chinese economic policies the US side says are unfair and violate market Beijing’s market opening commitments.

That truce is fragile, however, since the issues that caused talks to break down in May remain.

Since China is the biggest export customer for many of its neighbours and huge market for global suppliers of food, mobile phones and other goods, weaker growth is unwelcome. However, expectations for more government stimulus to combat the slowdown could drive share prices higher.

“We remain concerned about whether the credit expansion can boost real economic activities,” Raymond Yeung of ANZ said in a commentary. “We believe the People’s Bank of China will continue to adopt a targeted policy as opposed to quantitative easing to support growth.”

The mixed day in Asia followed a rally Friday in New York that pushed major US stock indexes to record highs, with the S&P 500 ending above 3,000 for the first time.

The Dow Jones Industrial Average gained 0.9 percent to 27,332.03. The S&P 500 rose 0.5 percent to 3,013.77 and the Nasdaq composite index advanced 0.6 percent to 8,244.14. All were record highs.

Investors are betting the Federal Reserve will cut its benchmark interest rate later this month for the first time in more than a decade to help counter slowing growth.

Bond yields have been moving higher for several days, suggesting investors are confident the US economy will power ahead, at least for the next several months.

The yield on the benchmark US 10-year Treasury note was 2.12 percent compared to the multi-year low of 1.95 percent the bond hit only 10 days ago.

ENERGY: Benchmark crude oil fell 17 cents to $60.04 per barrel in electronic trading on the New York Mercantile Exchange. It rose 1 cent to settle at $60.21 a barrel Friday in New York. Brent crude oil, the international standard, lost 8 cents to $66.64 a barrel.

CURRENCIES: The dollar rose to 108.05 Japanese yen from 107.91 yen on Friday. The euro was flat at $1.1271.


Category: FinanceAsia

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