Asian markets down on China trade data, US rate talk356 views
HONG KONG: Asian markets retreated Thursday as weak Chinese trade data reinforced worries about the world’s number two economy, while Federal Reserve minutes fanned expectations of a US rate hike before the year’s end.
However, troubled Samsung Electronics staged a slight recovery on bargain-buying after losing about 10 percent of its value this week on the Galaxy Note 7 crisis.
China said exports fell more than predicted last month, bringing an end to six months of increases, and disappointing markets after a recent upbeat reading on factory activity. Imports also fell, confounding predictions for a rise.
Analysts said the news will also likely put further pressure on the yuan currency, which is already at six-year lows against the dollar.
The figures are “consistent with a significant slowdown in global trade volumes”, Sue Trinh, head of Asia FX strategy at RBC Capital Markets in Hong Kong, told Bloomberg News.
They come just a week before the release of third-quarter growth data that are tipped to show the economic powerhouse and key driver to world trade growing at its slowest pace in a quarter of a century.
Shanghai fell 0.1 percent and Hong Kong lost 1.1 percent while Tokyo sank 0.4 percent by the break.
Sydney fell 0.8 percent, Seoul shed 0.6 percent and Singapore was 0.7 percent lower.
Bangkok was down 0.8 percent in the morning, extending a sharp sell-off this week on worries about the gravely ill King Bhumibol Adulyadej, who is considered a stabilising influence on the troubled nation.
Dealers were already nervous as the Fed minutes showed last month’s decision to hold rates was a “close call”, suggesting they are likely to move in December at the latest.
– ‘Locked and loaded’ –
“The market is becoming more confident that there is growth momentum in the US economy finally,” Paresh Upadhyaya, a Boston-based strategist at Pioneer Investment Management, told Bloomberg Radio.
“In the minutes, it changed its language to relatively soon, sending a really strong signal that they prefer to hike in December.”
The dollar soared to 104.72 yen in New York from 103.63 yen earlier in Asia. However, it gave up those gains in Tokyo Thursday, slipping to 103.68 yen.
“The US dollar is getting stronger as it looks like a December rate hike in the US is locked and loaded just awaiting the trigger,” said Greg McKenna, chief market strategist at AxiTrader.
The pound fell to $1.2184 from $1.2210, wallowing at 31-year lows on concerns about Britain’s exit from the European Union, which many fear will be “hard”, meaning it will not be allowed access to the bloc’s single market.
Samsung rose 1.5 percent, with Duncan Robertson, a portfolio manager at TT International, saying the firm “offers exceptional value; we have added to our position”.
Samsung lost more than 10 percent between Monday and Wednesday after it said it would stop making the Note 7 device and told customers not to use it.
Robertson added that the exploding battery issue “can only be a long-term threat if the company doesn’t take the correct steps to restore its brand. We have confidence that they have taken the correct steps so far”. –AFP