Asian stocks hit by poor US, China data
HONG KONG—Asian stock markets mostly slipped Monday after an anemic US jobs report last week and data showing Chinese inflation was still high despite Beijing’s monetary policy tightening.
Sydney was hit by a sell-off amid concerns over a proposed carbon tax unveiled by the government on Sunday, while the euro was also under pressure due to the ongoing European debt crisis, with Italy now in focus.
Tokyo closed 0.67 percent, or 68.20 points, lower at 10,069.53, Sydney dropped 1.56 percent, or 72.4 points, to 4,582.3 and Seoul fell 1.06 percent, or 23.19 points, to end at 2,157.16.
Hong Kong fell 1.67 percent, or 379.20 points, to 22,347.23.
But Shanghai gained 0.18 percent, or 4.92 points, to 2,802.69 thanks to a surge in airline shares following reports that the government will invest heavily in the sector.
The US Labor Department said on Friday that the economy created just 18,000 jobs in June, dashing hopes that the economic recovery might be gathering speed.
Market-watchers had been hoping for a strong rise after data Thursday showed strong growth in private sector jobs creation.
Hopes for the global recovery were dealt another blow Saturday when China announced inflation surged to a three-year high of 6.4 percent in June despite five interest rate hikes by leaders struggling to rein in soaring food costs.
The figure is up from May’s 5.5 percent and well above the government target of four percent.
China has hiked interest rates five times since October – most recently on Wednesday.
“We expect a day of risk-off sentiment (Monday) as markets adjust to poor US data and high CPI inflation… out of China over the weekend,” Credit Agricole said in a note to clients.
“The Chinese data is negative because it indicates that price pressures are continuing to spread throughout the economy despite policy tightening thus far and despite growth slowdown,” it added, according to Dow Jones Newswires.
However, shares rose after the Shanghai Securities News quoted the industry regulator as saying the government will offer subsidies and tax rebates to help air carriers launch more international routes and become more competitive.
But Okasan Securities strategist Hideyuki Ishiguro said there could be some support for markets due to expectations of a recovery in US employment in July as auto output recovers from parts supply problems caused by the Japan quake.
He also said many analysts consider China’s consumer prices index may have peaked in June and would begin to ease in the second half of the year.
Sydney’s S&P/ASX 200 fell as traders grew jittery over plans announced on Sunday to tax carbon pollution at Aus$23 ($24.74) per ton to help battle climate change.
Among the big losers were airlines Qantas and Virgin Australia, which slumped after the government confirmed it would not offer them concessions over the levy.
Rupert Murdoch-owned News Corp. was also sold off as investors reacted negatively to the phone-hacking scandal that resulted in the closure of its British tabloid News of the World.
On currency markets the euro dropped to $1.4124 in European trade from $1.4258 in New York late Friday while the European currency also retreated to 114.06 yen from 114.91 yen. The dollar fetched 80.73 yen against 80.55 yen.
The euro was weighed by fears that the eurozone debt crisis would spread to Italy.
Traders last week sold Italian debt and banking stocks as they worried about the possibility the country would be undermined by the same debt concerns as those hitting Greece, Portugal and Ireland.
The market is looking ahead to a top European officials’ meeting in Brussels later in the day at which they will “coordinate their positions” on the second Greek rescue package.
Also later this week the results of a “stress test” on Europe’s banking system will be released.
On oil markets, New York’s main contract, light sweet crude for delivery in August, fell 71 cents to $95.49 a barrel in the afternoon.
Brent North Sea crude for August delivery shed 87 cents to $117.46.
Gold closed at $1,546 -$1,547 an ounce in Hong Kong, up from $1,527-$1,528 at the close on Friday.
In other markets:
— Singapore fell 1.08 percent, or 33.91 points, to 3,117.37.
SingTel dropped 0.63 percent to Sg$3.17 and DBS Bank eased 0.6 percent to Sg$14.85.
— Taipei dipped 0.96 percent, or 83.70 points, to 8,665.85.
Taiwan Semiconductor Manufacturing Co was off 1.66 percent at Tw$71.3 while MediaTek, a leading design house, fell 4.68 percent to Tw$275.0.
— Manila fell 0.36 percent, or 15.60 points, to 4,375.86.
Philippine Long Distance Telephone dropped 1.2 percent to 2,348 pesos and geothermal power producer Energy Development slid 1.3 percent to 6.93 pesos but Metropolitan Bank and Trust Co. rose 1.74 percent to 72.90 pesos.
— Wellington ended 0.64 percent, or 22.04 points, lower at 3,434.10.
Fletcher Building fell 1.3 percent to NZ$8.24, Contact Energy lost 0.9 percent to NZ$5.28 and Telecom ended down 1.4 percent at NZ$2.46.
— Jakarta fell 0.20 percent, or 8.10 points, to 3,995.59.
Telkom dipped 2.1 percent to 7,050 rupiah and coal miner Bumi Resources dropped 0.8 percent 3,000 rupiah but Bank Rakyat jumped 0.7 percent to 6,850 rupiah.
— Kuala Lumpur fell 0.39 percent, or 6.16 points, to 1,588.58.
Gaming giant Genting was down 1.1 percent at 11.10 ringgit, Axiata Group shed 0.6 percent to 5.02 ringgit but Petronas Dagangan rose 1.9 percent to 17.42 ringgit.
— Bangkok fell 1.03 percent, or 11.22 points, to 1,077.24.
Banpu lost 12 baht to 716, while Siam Cement fell 5 baht to 370.
— Indian shares fell 0.72 percent, a second straight day of losses.
The benchmark 30-share Sensex Index ended down 136.55 points to 18,721.39. Trading was cautious ahead of the earnings season, which starts with software giant Infosys on Tuesday. Key economic data including monthly industrial output and inflation data are also due this week.
Infosys fell 1.98 percent, or 58.9 rupees, to 2,919.
