Asian markets slip on lower China growth target
HONG KONG—Asian markets fell on Tuesday after China cut its growth target for this year and caution over Greece’s debt deal overshadowed upbeat numbers from the United States.
Tokyo closed 0.63 percent, or 60.96 points, lower at 9,637.63 and Seoul slipped 0.78 percent, giving up 15.70 points to 2,000.36.
Sydney fell 1.37 percent, or 58.3 points, to end at 4,204.7 after the Australian central bank kept interest rates on hold as expected.
Hong Kong slumped 2.16 percent, or 459.06 points, to 20,806.25 and Shanghai shed 1.41 percent, or 34.55 points, to 2,410.45.
Traders said Monday’s announcement by Premier Wen Jiabao at the opening of the National People’s Congress – the annual parliamentary meeting – that China would target 7.5 percent growth in 2012 cast a pall over global markets.
It represents a further slowing in the world’s No. 2 economy – following 9.2 percent growth last year and 10.4 percent in 2010 – as its exports are buffeted by weak demand from US and European markets.
A slowdown in China would have a huge knock-on effect for other economies as they rely on it to drive their own growth.
“The forecast served as a reminder that while China is expected to engineer a soft landing, it remains a decelerating growth story,” said Stewart Hall, senior currency strategist at RBC Dominion Securities in a note.
“In a world starved for growth this is an unwelcome forecast,” he added, according to Dow Jones Newswires.
The prospect of slower Chinese growth also weighed on Wall Street where the Dow Jones Industrial Average ended 0.11 percent lower, the S&P 500 shed 0.39 percent and the tech-rich Nasdaq lost 0.86 percent.
And in Europe London’s FTSE 100, the DAX 30 in Frankfurt and the Paris CAC 40 all ended in the red.
US stocks fell despite figures showing the crucial services sector strengthened last month, according to a closely watched index released Monday.
The Institute for Supply Management’s services index rose to 57.3 percent from 56.8 in January, with the ISM’s business activity subindex jumping to 62.6 from 59.5. A reading above 50 means the sector is growing.
On forex markets the euro bought $1.3174 and 106.66 yen in early European trade, compared with $1.3218 and 107.76 yen in New York late Monday. The dollar was at 80.96 yen compared with 81.52 yen.
The Australian dollar slipped to a two-week low of 105.98 US cents from 106.53 after the country’s central bank’s decision to hold rates, while analysts did not count out further rate cuts.
Adding to the downbeat sentiment is caution over the outcome of Greece’s deal with private-sector bondholders as the deadline for them decide on whether or not to sign up for a debt writedown approaches Thursday.
If all creditors agree to the offer it would cut 107 billion euros from Greece’s total 350-billion-euro debt mountain.
Oil prices continued to get support from Iran’s stand-off with the West over its nuclear program, which Washington is convinced is being used to make an atomic bomb.
New York’s main contract, West Texas Intermediate crude for delivery in April, gained 7 cents to $106.79 per barrel while Brent North Sea crude for April was up 16 cents at $123.96.
In the latest development Israeli Prime Minister Benjamin Netanyahu on Monday told US President Barack Obama that Israel must remain the “master of its fate” in a firm defense of his right to mount a unilateral strike on Iran.
Israel fears tough US and European sanctions on Iran will not convince Tehran to renounce a nuclear arsenal but Iran insists its nuclear program is solely for peaceful civilian purposes.
Gold was at $1,686.45 an ounce at 1057 GMT, compared with $1,702.00 late Monday.
In other markets:
— Singapore fell 2.00 percent, or 59.79 points, to 2,932.01.
Real estate developer Capitaland closed 3.92 percent lower at Sg$2.94 while commodities firm Olam International shed 2.61 percent to Sg$2.24.
— Taipei closed 0.83 percent, or 66.77 points, lower at 7,937.97.
Hon Hai fell 0.7 percent to Tw$99.8 while Taiwan Semiconductor Manufacturing Co. was 0.76 percent higher at Tw$79.5.
— Manila ended 1.26 percent, or 63.39 points, lower at 4,967.39.
— Wellington gained 0.41 percent, or 14.00 points, to end at 3,401.83.
Fletcher Building fell 2.8 percent to NZ$6.66, Chorus added 0.6 percent to NZ$3.33 and Telecom was 3.7 percent higher at NZ$2.27.
— Kuala Lumpur ended flat, edging up 0.69 points to 1,589.91.
Financial firm CIMB Group fell 0.80 percent to 7.42 ringgit, while plantation company Sime Darby lost 0.10 percent to 9.99 ringgit. Telekom Malaysia gained 1.55 percent to 5.25 ringgit, while budget carrier AirAsia inched up 0.54 percent to 3.70 ringgit.
— Jakarta closed 0.45 percent, or 17.82 points, off at 3,967.08.
State-owned lender Bank Rakyat Indonesia fell 0.8 percent to 6,600 rupiah, tin miner Timah shed 1.6 percent to 1,890 rupiah and the country’s biggest instant-noodle maker Indofood Sukses Makmur lost 2 percent to 4,950 rupiah.
— Bangkok gave up 0.41 percent, or 4.79 points, to end at 1,153.16.
Banpu dropped 0.93 percent to 638 baht, while PTT fell 1.40 percent to 353 baht.
— Mumbai fell 189.58 points, or 1.09 percent, to 17,173.29 on concerns that the ruling Congress party was headed for a stinging election blow as results emerged from five state polls.
Market players fear the results will impact on Congress’s ability to push through stalled reforms, which are vital to revive slowing growth in Asia’s third-largest economy.
India’s largest private aluminium producer Hindalco slid for a second straight day, down 5.75 percent to 131.85 rupees while the local arm of resources group Vedanta fell 5.4 percent to 113.85.
