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Asian Market Update – Thursday: Asian Stocks Flat after Weaker Chinese Economic Data

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Asian Market Update – Thursday: Asian Stocks Flat after Weaker Chinese Economic Data

Introduction

This article was posted on Thursday, 08:10, UTC.

The Big Question: Is the Chinese economy cooling again?

Major equity markets in the Asia Pacific remain flat, as a set of fresh economic data suggested that the world’s second-largest economy cooled down last month unexpectedly.

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The Shanghai Composite Index skidded 0.03 percent to 3,383.25 before midday on Thursday. In Hong Kong, the Hang Seng Index was down 0.34 percent 27,800.21.

In Japan, the Nikkei 225 was trading 0.04 percent above the flat line at 19,873.62.

In South Korea, the KOSPI index ticked up 0.06 percent to 2,361.50 around midday.

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Down under, the ASX 200 added 0.21 percent to 5,758.70.

As geopolitical tensions on the Korean Peninsula took a back seat, investors appear to be looking at scores of economic data out of China and seeking new direction.

China’s industrial production grew 6 percent in August from a year ago, below a projected 6.6 percent, slowing down further from a 6.4 growth in the previous month.

Retail sales rose 10.1 percent in August from the previous year, lower than the projected 10.5 percent and July’s 10.4 percent growth. Growth fixed-asset investments in urban areas also missed the forecast of 8.2 percent, coming in at 7.8 percent.

The Chinese economy maintained relatively stable and even better-than-expected performance in the first few months of the year, with a GDP growth of 6.9 percent in the first half of the year. Though more data are needed to judge performance, the data on Thursday suggest things are cooling down.

Unsurprisingly, Chinese officials seem to be confident about the country’s economic growth. Premier Li Keqiang, speaking in a meeting with heads of six global economic organizations, said the Chinese economy is strong and will remain stable.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan-Nikkei Stock Average 225 19,873.62 0.04%
China-Shanghai Composite Index 3,383.25 -0.03%
Australia-ASX 200 5,758.70 0.21%
Hong Kong-Hang Seng 27,800.21 -0.34%
South Korea- KOSPI 2,361.50 0.05%

Cryptocurrencies

Digital currencies continued on a downtrend overnight as both bitcoin and ethereum prices pointed lower.

Bitcoin prices declined 1.73 percent in the Asian trading session to $3,798. The virtual currency dropped below the $4,000 mark on Wednesday and seemed to lack the strength to bounce back up.

Ethereum saw an even larger fall of 2.04 percent overnight, changing hands at $269. Despite an earlier surge to as high as $280 in early morning trading, the ethereum price was in an overall downtrend.

Cryptocurrencies have been having a tough couple of weeks, mainly due to reports out of China about a ban on ICO’s and rumors of cracking down on commercial cryptocurrency trading. This has now pushed down the prices of bitcoin and ethereum from highs of nearly $5,000 and $400, respectively, to way below $4,000 and $300.

Currencies

The Japanese yen lost a slight 0.01 percent against the US dollar overnight to 110.49 per dollar. The greenback has been strengthening against the yen in the last three days after talks of tax reforms and weaker hurricane impact.

The Chinese yuan lost 0.07 percent to 6.5449 per dollar. The yuan has been losing against the dollar after the People’s Bank of China, the central bank, made a couple of adjustments to foreign exchange regulations, indicating it would let the yuan float more freely.

The Australian dollar gained 0.25 percent to 1.2492 per dollar overnight.

Commodities

WTI Oil lost 0.22 percent to $49.18 per barrel.

Brent Crude was down 0.11 percent to $54.98 per barrel.

Gold gained 0.05 percent to $1,321.73 an ounce.

Business News across Asia

In China, officials confirmed that US President Donald Trump will make his first visit to Beijing as president in November, though a specific date has not yet been set. Aides to Trump and President Xi Jinping are reportedly working hard to nail down an agenda for the talks. Trade and North Korea could top that agenda.

Take away: The first meeting of the two in May in Trump’s Florida resort was very positive and boosted financial markets that had worried about a potential trade war between the world’s two largest economies. All eyes would be on this one again because things haven’t been going too well since they met last time, with stalled talks on trade and volatility on the Korea Peninsula.

In India, a visit by Japanese Prime Minister Shinzo Abe has consumed much of the country’s news coverage. Most of the headlines focused on how India and Japan could work together to challenge China, with which both countries are not happy. The visit also saw the launch of India’s first bullet train project with Japanese support.

Take Away: With the positive tone out of New Delhi towards Japan, Japanese companies could get a lot more projects in India, which has a massive demand for infrastructure and other projects.  

Featured image from Flickr.

 

 

 

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Fredrik Vold

Fredrik Vold

Fredrik Vold is an entrepreneur, financial writer, and technical analysis enthusiast. He has been working and traveling in Asia for several years, and is currently based out of Beijing, China. He mainly follows the stock and forex markets, and is always looking for the next great alternative investment opportunity.

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