Asia report: Markets lower despite better-than-expected China data

Equity markets in Asia closed mostly weaker on Tuesday, as investors digested fresh trade data out of China and continued to monitor the ongoing spread of Covid-19 around the world.

In Japan, the Nikkei 225 was down 0.87% at 22,587.01, as the yen weakened 0.09% against the dollar to last trade at JPY 107.39.

Of the major components on the benchmark index, robotics specialist Fanuc was down 0.69%, Uniqlo owner Fast Retailing lost 2.11%, and technology giant SoftBank Group was 1.36% weaker.

The broader Topix index closed 0.5% weaker by the end of trading in Tokyo, settline at 1,565.15.

On the mainland, the Shanghai Composite was off 0.83% at 3,414.62, and the smaller, technology-centric Shenzhen Composite lost 0.85% to 2,309.57.

In fresh data out of China, the country’s dollar-denominated trade came in above expectations for June, with exports up 0.5%, compared to a 1.5% decline anticipated by economists polled by Reuters.

Imports, meanwhile, were ahead 2.7% year-on-year, beating the 10% fall expected by Reuters polling.

“The latest Chinese trade data did appear to offer some optimism, that the Chinese economy was continuing its slow road back from its February lockdown,” said CMC Markets chief market analyst Michael Hewson.

“This could bode well for this week’s China second quarter GDP data which is due out on Thursday, and is expected to see a rather optimistic quarterly bounce back of 9.5%.”

Hewson did note, however, that the improvement in Chinese data did not appear to have offered much in the way of a catalyst for a recovery in Asia markets on Tuesday.

South Korea’s Kospi shrunk 0.11% to 2,183.61, while the Hang Seng Index in Hong Kong was down 1.14% at 25,477.89.

The blue-chip technology plays were a mixed bag in Seoul, with Samsung Electronics rising 0.75%, while chipmaker SK Hynix lost 0.12%.

In Singapore, the Straits Times Index was 0.41% lower at 2,620.19, after fresh data showed the city-state’s economy shrinking 41.2% quarter-on-quarter in the second three-month period of the year.

That, according to the Ministry of Trade and Industry, was the second quarter of contraction in a row, meaning Singapore entered a technical recession.

The Covid-19 pandemic continued to guide sentiment, with Tedros Adhanom Ghebreyesus, director-general of the World Health Organization, warning that “too many countries are headed in the wrong direction” overnight.

“In several countries across the world, we are now seeing dangerous increases in Covid-19 cases, and hospital wards filling up again,” he said.

“It would appear that many countries are losing gains made as proven measures to reduce risk are not implemented or followed.”

Oil prices were lower as the region went to bed, with Brent crude last down 0.68% at $42.43 per barrel, and West Texas Intermediate off 0.82% at $39.77.

In Australia, the S&P/ASX 200 was off 0.61% by end-of-play in Sydney, ending the day at 5,941.10, as the hefty financials subindex lost 0.49%.

The major banks were all weaker in the sunburnt country, with Australia and New Zealand Banking Group down 1.18%, Commonwealth Bank of Australia off 0.54%, National Australia Bank losing 0.39%, and Westpac Banking Corporation slipping 0.78%.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 went against the regional trend, adding 0.52% to close at 11,595.14, led higher by fisheries firm Sanford, which was ahead 4.4%.

The down under dollars were a mixed picture against the greenback, with the Aussie last 0.18% stronger at AUD 1.4383, while the Kiwi weakened 0.16% to NZD 1.5316.