Asia report: Most markets join sell-off amid slew of data

Most equity markets in the Asia-Pacific region joined the global sell-off on Thursday, following a dire session on Wall Street overnight which saw the Dow Jones Industrial Average tumble almost 1,200 points.

In Japan, the Nikkei 225 was down 1.89% at 26,402.84, as the yen strengthened 0.37% on the dollar to last trade at JPY 127.76.

It was a negative day for the benchmark’s major components, with robotics specialist Fanuc down 0.94%, Uniqlo owner Fast Retailing losing 3.12%, and tech investing giant SoftBank Group 1.6% lower.

The broader Topix index lost 1.31% by the end of trading in Tokyo, closing at 1,860.08.

Fresh data out of Tokyo earlier showed Japan’s exports growing 12.5% year-on-year in April, missing Reuters-polled expectations for a 13.8% improvement.

Craig Botham at Pantheon Macroeconomics said China’s ‘zero-Covid’ policies were to blame for Japan’s export miss.

“Activity data for China showed a collapse of domestic growth in April, with both industrial production and retail sales shrinking in year-on-year terms, as factories were closed, and consumers locked in their homes,” Botham said.

“Exports to Korea also slowed sharply, to 15.8% year-on-year from 26.2% in March, which seems likely to represent further spillovers from China’s slowdown, given the importance regional supply chains play in trade.”

Among other major trade partners, exports to the United States also slowed, but those to the European Union and ASEAN economies accelerated in April.

“Overall, exports ex-China slowed to 17.6% year-on-year, from 18.0%, so the headline is mostly, but not entirely, a China story.”

Stocks in mainland China were the region’s odd one out, with the Shanghai Composite gaining 0.36% at 3,096.96, and the smaller, technology-centric Shenzhen Composite adding 0.58% to 1,952.71.

South Korea’s Kospi was 1.28% lower at 2,592.34, while the Hang Seng Index in Hong Kong slid 2.54% to 20,120.68.

Chinese technology plays were in focus in the special administrative region, with Tencent Holdings tumbling 6,51% after it reported a halving of its quarterly profits.

The Hang Seng Tech Index was 3.98% lower by the end of the day, with Alibaba Group plunging 7.39% and Meituan 3.78% weaker.

Seoul’s blue-chip technology stocks were also on the back foot, with Samsung Electronics down 0.88% and SK Hynix losing 2.2%.

Oil prices were lower as the region went to bed, with Brent crude last down 1.% on ICE at $108.02 per barrel, and West Texas Intermediate falling 1.47% to $107.98 on NYMEX.

In Australia, the S&P/ASX 200 was 1.65% lower at 7,064.50, after the country’s monthly unemployment data came in at its lowest level ever, at 3.9%.

The Australian Bureau of Statistics said the last time unemployment was lower was in 1974, when the survey data was released on a quarterly basis.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 weakened 0.46% to 11,206.93, as investors there digested the government’s budget announcement as well as fresh official economic forecasts.

New Zealand’s Treasury said it expected the economy to expand by 4.2% in the year to June 2023, with growth then falling off markedly to 0.7% in 2024 and 1.6% in 2025.

Inflation, meanwhile, was pencilled in at 5.2% for the 2023 financial year, with officials not expecting it to fall back into the Reserve Bank of New Zealand’s target range of 1% to 3% before 2025.

The down under dollars were both stronger on the greenback, with the Aussie last ahead 0.6% at AUD 1.4294, and the Kiwi advancing 0.8% to NZD 1.5757.

Reporting by Josh White at Sharecast.com.