Asia report: Markets tumble on mixed trade data from China

While the market initially saw some positivity with surprising growth in imports for October, concerns were raised as exports from the world’s second-largest economy fell more sharply than expected.

“Asia stocks experienced a decline across the board, retreating from the previous day’s gains, with Wall Street’s mixed performance contributing to the uncertainty,” said Patrick Munnelly, market analyst at TickMill Group.

“South Korea’s KOSPI was a significant underperformer, dropping over 2.8% following the previous day’s surge driven by the ban on stock short-selling.

“The Nikkei 225 fell below the 32,5K handle, aligning with losses in the broader region.”

Munnelly noted that both the Hang Seng and Shanghai Composite opened negatively, reflecting overall market sentiment.

“Although the Chinese trade balance data for October was narrower than expected, imports surprisingly saw growth, leading to relatively subdued price action.

“Additionally, China Vanke’s shares strengthened after state shareholders signalled their intent to provide liquidity support.”

Japanese stocks plunge, Asian markets down after turbulent session

In Japan, the Nikkei 225 index retreated by 1.34% to close at 32,271.82, and the Topix index declined by 1.17% to 2,332.91.

Notable fallers on Tokyo’s benchmark included Ajinomoto Co plunging by 10.21%, Shimizu dropping 8.49%, and NTT Data declining by 6.58%.

China’s stock markets displayed more resilience, with the Shanghai Composite edging down by a mere 0.04% to 3,057.27 and the Shenzhen Component slipping 0.15% to 10,056.49.

Shanghai’s losses were led by Beijing Worldia Diamond Tools, down by 7.16%, and Dalian Sunasia Tourism Holding, which fell by 4.55%.

Hong Kong’s Hang Seng Index faced a more significant setback, sliding by 1.65% to 17,670.16.

Among the biggest losers in the special administrative region were Wharf Real Estate Investment, down 4.91%, Shenzhou International Group, declining by 4.86%, and Zhongsheng Group, which dropped 4.71%.

South Korea’s Kospi index recorded a substantial decline of 2.33% to 2,443.96, with Posco Holdings and Posco Future M both plunged by 11.02%.

Australia’s S&P/ASX 200 experienced a more modest decline of 0.29% to 6,977.10, led lower by Allkem and Liontown Resources, which posted losses of 4.35% and 3.95%, respectively.

In New Zealand, the S&P/NZX 50 index dipped by 0.33% to 11,223.86, as KMD Brands and Oceania Healthcare fell by a respective 4.44% and 4.23%.

Turning to currency markets, the dollar was last up 0.19% on the yen, trading at JPY 150.35.

Meanwhile, the greenback strengthened 1.03% against the Aussie to AUD 1.5570, while it advanced 0.69% against the Kiwi, changing hands at NZD 1.6882.

In oil markets, Brent crude futures were last down 1.93% on ICE to $83.54 per barrel, while the NYMEX quote for West Texas Intermediate dropped 1.77% to $79.39.

China exports tumble, imports surprise to the upside

In economic news, China’s trade data for last month revealed a more substantial decline in exports than expected, while imports defied forecasts with an unexpected increase.

According to official customs data released on Tuesday, China’s exports experienced a year-on-year drop of 6.4% in October, following a 6.2% slide in September.

That decline exceeded expectations, as forecasts had predicted a milder fall of 3.5%.

Conversely, the realm of imports displayed resilience by registering a 3% increase, in stark contrast to September’s 6.3% decline and expectations of a 4.8% decrease.

That marked the first uptick in imports in seven months, and as a result, China’s trade surplus saw a significant reduction, narrowing to $56.53bn from September’s upwardly revised figure of $77.71bn.

Looking at the specifics, China faced challenges as exports to the US fell by 9.3%, and exports to the EU witnessed a substantial decline of 11.6%.

Exports to ASEAN countries, which constitute China’s largest trade partner, tumbled by a substantial 15.1%.

Among various sectors, the auto industry stood out with strengthened exports, while computer exports faced a notable decline of 20.2%.

“The continued decline in Chinese exports points to a still-dull global demand,” said Duncan Wrigley at Pantheon Macroeconomics.

“By contrast, Korean exports rebounded 5.1% in October, but this was on the back of firming chip prices rather than stronger demand.

“Global demand is likely to remain sluggish going into 2024, given that China’s new export orders PMI has been under 50 for the past four months.”

Reporting by Josh White for Sharecast.com.