Asian shares fell on Thursday, as a weak Chinese trade data stoked fears of a growth slowdown, further undermining risk appetites already reduced by worries about the health of Spanish banks and deepening political chaos in Greece.

MSCI’s broadest index of Asia-Pacific shares outside Japan, which has declined the past five days, slipped 0.1% to its lowest in nearly four months. Earlier, it briefly rose as much as 0.5% on strong Australian jobs data that was released before China’s April trade figures.

China’s exports grew 4.9% in April from a year earlier, data showed on Thursday, weaker than a 8.5% increase forecast and down from March’s rise of 8.9%. Annual growth of 0.3% in imports last month also missed expectations for an 11% increase.

“Chinese trade data for April came in surprisingly weak, with both export and import growth disappointing …indicating weakening external demand and suggesting that strengthening of the yuan in the past few years has undermined China’s competitiveness,” said Dariusz Kowalczyk, senior economist and strategist at Credit Agricole CIB in Hong Kong.

“The poor import number bodes ill for GDP growth. It should be a wake-up call for policymakers to do more to stimulate domestic demand” , he said, adding that weak exports “may convince policymakers to try and prevent any meaningful appreciation of onshore spot.”

The Australian dollar initially strengthened on strong jobs data, which scaled back expectations for further aggressive monetary easing. But with the currency sensitive to data from China, the biggest export market, the gains were pared by Beijing’s fresh trade numbers.

The Aussie last stood up 0.4% at $1.0079, slipping from an earlier high of $1.0120. On Wednesday, it touched $1.0021, its lowest since December 20.

Australian employment far outpaced expectations by adding 15,500 in April while the unemployment rate surprisingly dipped to 4.9%.

The Australian stock market lost most of its gains to stand nearly flat after rising earlier on buoyancy in miners, which bounced back on upbeat comments from world No. 3 miner Rio Tinto Ltd.

Oil fell as weak Chinese trade data fuelled concerns about demand, sending US crude down 0.4% at $96.38 a barrel and Brent down 0.5% at $112.66 a barrel.

Japan’s Nikkei share average fell 0.2%.

Asian credit markets stayed subdued, with the spread on the iTraxx Asia ex-Japan investment-grade index nearly unchanged from overnight.

EUROPE VACUUM FEARED

Global shares slid for a sixth day while safe-haven US and German government debt rose on Wednesday on fears a political vacuum in Greece could put the highly indebted country on course for insolvency and exiting from the euro.

The euro turned around also from an earlier weakness, rising 0.1% at $1.2940. But it hovered near $1.29115 hit on Wednesday, its lowest since January 23, indicating markets remain wary over developments in the euro zone, which have fallen short of convincing investors to be risk-positive.

For more visit: Business Standard

Similar Posts:

• Asian shares steady as China data eyed; Europe worries weigh
• Asian shares up on Wall St rally, China hopes
• Asian shares edge up as resource stocks bounce back
• Asian markets gain as China cooling worries ease
• Asian shares fall after data, ECB disappoint – Nifty below 5100