Asia report: Stocks slump on China, Australia trade data

Asia-Pacific markets slumped on Thursday, mirroring moves on Wall Street as investors assessed trade data from China and Australia.

China's November export and import numbers surprised expectations, while the trade surplus for the world's second-largest economy also widened more than expected.

Oil prices were also rebounding slightly.

"Asia markets have struggled with the latest set of Chinese trade numbers pointing to an economy that is still struggling, and a downgrade by Moody's on China's credit outlook, along with downgrades to banks and other small companies," said CMC Markets chief market analyst Michael Hewson.

"In October Chinese import data broke a run of 10 consecutive negative months by rising 3% in a sign that perhaps domestic demand is returning, beating forecasts of a 5% decline."

Hewson said a bigger than expected decline in exports was "slightly more worrying", which fell 6.4% for the sixth month in a row of falls.

"Today's November numbers have seen imports decline by 0.6%, against an expectation of a rise to 3.9% in a sign that domestic demand is still very weak, while exports improved, rising by 0.5%, a solid pick up from the 6.4% decline in October."

Bourses a sea of red across Asia-Pacific region

In Japan, the Nikkei 225 index fell by 1.76% to 32,858.31, while the Topix index declined by 1.14% to 2,359.91.

The losses on Tokyo's benchmark were led by Kawasaki Kisen Kaisha, down 4.95%, Advantest, down 4.69%, and CyberAgent, down 4.45%.

China's Shanghai Composite index dipped slightly by 0.09% to 2,966.21, while the Shenzhen Component slipped 0.14% to 9,519.91.

Among the biggest losers in Shanghai were Changchun Yidong Clutch, which saw a decline of 10.02%, and Chongqing Road & Bridge, which was down 9.96%.

Hong Kong's Hang Seng Index also experienced a decline of 0.71%, closing at 16,345.89.

Key stocks such as Xinyi Solar, down 4.57%, Hansoh Pharmaceutical Group, down 4.22%, and CSPC Pharmaceutical Group, down 3.65%, led the city's negative performance.

South Korea's Kospi index decreased by 0.13% to 2,492.07, with losses from LG Electronics, down 4.7%, and Orion, down 3.78%.

Australia's S&P/ASX 200 index registered a minor decline of 0.07% to 7,173.30, led lower by Paladin Energy, down 6%, and Star Entertainment Group, down 4.46%.

In contrast, New Zealand's S&P/NZX 50 index showed resilience, rising by 0.29% to 11,496.61.

Wellington's gains were led by Investore Property, up 4.9%, and Oceania Healthcare, up 4.41%.

On the currency front, the dollar was last down 1.64% on the yen, trading at JPY 144.89.

The greenback was also in the red against its downunder counterparts, last falling 0.22% on the Aussie to AUD 1.5237 and retreating 0.07% against the Kiwi to change hands at NZD 1.6279.

Oil prices showed a modest rebound, with Brent crude futures last up 1.33% on ICE at $75.29 per barrel and the NYMEX quote for West Texas Intermediate rising 1.24% to $70.24.

Trade data from China, Australia in focus

In economic news, China reported a notable reversal in its trade performance for November.

Exports from the People's Republic saw a year-on-year increase of 0.5%, bouncing back from a 6.4% decline recorded in October.

That performance exceeded the expectations of a 1.1% decline pencilled in by a Reuters poll.

However, the picture for imports to the world's second-largest economy differed, as they dropped by 0.6% compared to the same period a year ago.

That drop surprised market watchers, who had anticipated a 3.3% rise.

As a result, China's trade balance expanded to $68.39bn in November, surpassing the $56.53bn reported in October and the estimated figure of $58bn.

"China's exports appear to have bottomed out, but the outlook is only for a weak recovery going into 2024, given the likely prospect of soft global demand," said Pantheon Macroeconomics chief China economist Duncan Wrigley.

"Both the Caixin and the official PMIs indicate falling new export orders."

Wrigley explained that multinationals were partly shifting supply chains away from China, under political pressure from the US in particular.

"But China's vast industrial base ensures cost and other competitive advantages in electric vehicles, solar panels and electronic products which will be hard to match in the near term."

Meanwhile, Australia's trade surplus widened to AUD 7.13bn for October, up from the prior month's AUD 6.79bn.

However, the figure fell short of the AUD 7.5bn estimated by economists in a Reuters poll.

The Australian Bureau of Statistics said exports experienced a month-on-month growth of 0.4%, amounting to AUD 182m, with metal ores and minerals significantly contributing to the increase.

In contrast, imports decreased 1.9%, equivalent to AUD 763m, from the prior month, primarily due to declines in importing industrial transport equipment.

Reporting by Josh White for Sharecast.com.