Asia: Chinese slowdown drags most stocks lower

Asian stocks were largely in the red on Tuesday, after Chinese trade data pointed to a decline in global and domestic demand.

The Shanghai Composite Index lost 0.57%, while Hong Kong’s Hang Seng rose 0.17% after figures showed overseas sales of Chinese goods continued to recover in September but import volumes missed economists' forecasts.

According to data from the General Administration of Customs, in US dollar terms exports slipped 3.7% year-on-year last month, while imports fell 20.5% year-on-year in September.

Although the data hinted at some softening in domestic demand last month, the decline in the headline rate was dragged down by the drop in global commodity prices.

"Import volumes are holding up much better," said Julian Evans-Pritchard, China economist at Capital Economics.

"Looking ahead, we expect stronger growth in China’s main trading partners to shore up exports over the coming quarters while a pick-up in investment spending should boost imports.”

However, some analysts were not as optimistic and warned China's slowdown could last longer than expected, with repercussions to be felt in worldwide equity markets.

“This highlights the difficult transition China faces moving from export to consumption-led model and delivers another clear signal to an over-supplied commodities space that considerable demand for raw materials is lacking,” said Michael Van Dulken, head of research at Accendo Markets.

Over in Japan, the Nikkei Stock Average declined 1.11% after official figures showed consumer confidence in Asia’s second largest economy declined unexpectedly in September.

According to data from the Cabinet Office, Japanese consumer confidence declined from 41.7 to 40.6 last month, falling short of the 40.6 reading analysts had expected.

The overall livelihood sub-index fell 1.3 points to 38.8, while the indicator for income growth fell 0.5 to 39.4 last month.

Elsewhere, Australia’s S&P/ASX 200 declined 0.57%, while South Korea’s Kospi slid 0.13%.

On the currencies front, the yen climbed 0.29% against the dollar, while the greenback gained 0.49% against its Australian counterpart.

Meanwhile, the Malaysian ringgit and the Indonesian rupiah tumbled 1.38% and 1.17% respectively, as the slowdown in China piled more pressure on emerging markets.