Asia report: Markets mixed as China trade data underperforms

by | Aug 8, 2023

(Sharecast News) – Asia-Pacific markets ended Tuesday with a mixed performance, with notable fluctuations seen across key indices.
In focus was China’s trade data for July, which underperformed expectations.

Markets show mixed performance amid China’s unexpected trade data

Japanese markets painted a positive picture, with the Nikkei 225 and Topix advancing by 0.38% and 0.34%, respectively.

Companies such as Meiji Holdings, Comsys Holdings, and Kawasaki Kisen Kaisha witnessed significant surges, with their shares jumping by 10.41%, 9%, and 5.82% in order.

In China, both the Shanghai Composite and the Shenzhen Component registered mild declines, dropping by 0.25% and 0.42%.

Among the biggest losers in Shanghai were Harbin Hatou Invest, down by 9.99%, and Hua Yuan Property, which declined by 8.97%.

Hong Kong’s Hang Seng Index took a steeper hit, declining by 1.81%.

Major stocks such as Country Garden Holdings, Country Garden Services, and Zhongsheng saw sizeable declines, with falls of 14.39%, 9.68%, and 5.8% respectively.

Over in South Korea, the Kospi ended 0.26% lower, with companies like SD Biosensor and Naver Corp dropping by 9.91% and 4.9%.

Meanwhile, Australia’s S&P/ASX 200 experienced a marginal gain of 0.03%.

James Hardie Industries led with a 14.38% rise, followed by Reece which increased by 3.93%.

The S&P/NZX 50 in New Zealand declined by 0.55%, driven by the drops in shares of Restaurant Brands NZ and Fletcher Building, which decreased by 7.14% and 3.03% respectively.

In the currencies segment, the dollar strengthened against the yen, as well as its Aussie and Kiwi counterparts, by 0.39%, 0.84%, and 0.79% respectively.

Lastly, oil prices saw a dip, with Brent crude and West Texas Intermediate declining by 1.14% and 1.1%, settling at $84.37 and $81.04 per barrel respectively.

China, Japan, and Philippines reveal new trade and spending data

In economic news, China’s trade metrics for July experienced a steeper downturn than initially forecast.

The country reported a 14.5% year-on-year decrease in exports and a 12.4% reduction in imports, diverging from Reuters-polled economists’ predictions of 12.5% and 5%, respectively.

Additionally, China’s customs data unveiled a year-on-year decline of 13.6% in total July trade, amounting to $482.92bn.

The country’s trade surplus also dipped by 19.4% year-on-year, resting at $80.6bn for July.

“China’s exports are likely to continue falling in the second half, as the US is likely to enter a mild recession, while the eurozone economy probably will remain weak,” said Duncan Wrigley at Pantheon Macroeconomics.

“Exports are now falling in all of China’s significant markets, except Russia, meaning that China will need to rely more on domestic demand to stabilise growth in the second half.

“But China is opting for only a limited stimulus, largely focused on supply-side measures, though also including tax cuts for SMEs and an incremental loosening of city-level property policies, such as mortgage terms.

“Policymakers appear determined to allow household spending and business investment to take the lead in this recovery cycle, even if that means a drawn-out, ‘tortuous’ upturn.”

Over in Japan, household expenditure saw a more pronounced drop in June, declining by 4.2% year-on-year.

That marked the fourth consecutive month of downturn, exceeding May’s 4% decrease.

While food remained the dominant component of household expenses, furniture and household utensil spending witnessed the most significant drop at 17.6% year-on-year.

Additionally, official figures highlighted a monthly household consumption average of JPY 275,545 for June.

In contrast, the monthly household income averaged 898,984 yen, marking a 5.6% reduction from the prior year.

The Philippines also disclosed its trade figures for June, revealing a trade deficit of $3.918bn.

The nation’s import numbers decreased by 15.2% year-on-year to $10.62bn.

However, a slight uptick was observed in exports, growing by 0.8% to reach $6.7bn.

Reporting by Josh White for

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