Asian stocks ended on a subdued note Friday, as weak Chinese trade data heightened economic concerns. With exports rising just 1 percent year-over-year against an expected 8 percent growth, Chinese trade surplus narrowed sharply to $25.1 billion in July compared to a forecast $35.2 billion, increasing worries that the world's second-largest economy may suffer a hard landing.
Anticipation of policy action out of China and the prospect of ECB action to lower borrowing costs in the peripheral countries helped to limit the downside across Asia to some extent.
Tokyo stocks retreated as concerns about a slowdown in the Chinese economy prompted investors to book some profits after a four-day rally. Futures-led selling due to position-squaring ahead of the weekend and next week's holiday season in Japan also weighed on markets. The benchmark Nikkei average lost a percent, while the broader Topix index ended 0.7 percent lower.
Olympus Corp. fell 1.5 percent as the scandal-hit company posted a $57 million quarterly loss, weighed down by losses at its camera business and the stronger yen. Electronic parts maker Taiyo Yuden soared 10.3 percent and mobile gaming firm DeNA jumped 22 percent on strong earnings. Sony advanced 2.7 percent after it announced a tender offer to purchase all remaining shares in its subsidiary So-net.
China's Shanghai Composite index snapped a five-day winning streak to end 0.2 percent lower, as weaker-than-expected trade and credit data for July released Friday coming on the heels of disappointing industrial production and retail sales data dented hopes that the slowdown is bottoming out.
New yuan loans issued by Chinese financial institutions totaled 540 billion yuan in July versus expectations of 690 billion yuan, data from the People's Bank of China revealed.
Hong Kong's Hang Seng index fell 0.7 percent, with speculation concerning an imminent Chinese policy easing as early as over the weekend helping limit further downside.
Australian shares fell notably after data showed Chinese trade surplus unexpectedly narrowed in July. The benchmark S&P/ASX 200 index fell 0.7 percent, while the broader All Ordinaries index slid 0.6 percent. Miner BHP Billiton edged down 0.3 percent, Rio Tinto slid 0.7 percent and smaller rival Fortescue lost 1.6 percent after surveys showed Chinese manufacturing barely grew in July.
Banks ended mostly lower, with Commonwealth and Westpac retreating about 2 percent each after the Reserve Bank of Australia slightly lifted its forecast for the inflation rate this year to December 2012 by a quarter of a percentage point. Alongside its outlook for inflation, the central bank said it expects the economy to expand by an average 3.75 percent in 2012, faster than the 3 percent growth predicted in the May statement.
The Australian dollar weakened after the RBA cautioned against risks emanating from persistent strength of the dollar. "In the domestic economy, important risks revolve around exchange rate developments," the bank said in its latest quarterly statement on monetary policy.
Seoul shares ended modestly higher on continued hopes that major central banks will unveil more monetary stimulus measures to bolster economic growth. The benchmark Kospi average rose 6 points or 0.3 percent to 1,946, extending gains for a fifth consecutive session on the back of renewed foreign buying.
Tech shares and automakers led the gainers, while chemical makers and builders lost ground. Among the prominent gainers, heavyweight Samsung Electronics rose 0.6 percent, Hyundai Motor gained 1.2 percent and LG Display climbed 3 percent. Shares of Donbgu Steel tumbled 3.6 percent on equity dilution worries.
New Zealand shares edged lower as investors awaited earnings results for directional cues. The benchmark NZX-50 index fell by 6 points or 0.2 percent to 3,578. Heartland New Zealand, the would-be bank, tumbled 3.6 percent on saying it expects a decision on its application for a banking license by November. Steel & Tube lost half a percent after the construction materials supplier reported a 23 percent fall in annual profit, as subdued construction activity and stiff competition dented margins.
Fletcher Building, the nation's largest construction company, fell 1.2 percent and infrastructure investment firm Infratil lost a percent, while utility Contact Energy and phone company Telecom rose 0.6 percent and 1.1 percent, respectively.
Elsewhere, India's benchmark Sensex was down 0.1 percent on worries over weak monsoon rains and slowing domestic growth, while key benchmark indexes in Singapore, Malaysia and Taiwan rose between 0.1 percent and 0.3 percent.
Commodities are retreating and the euro fell to a six-day low against the greenback on worries about slowing global growth.
According to data released by the Ministry of Trade and Industry this morning, the Singapore economy shrank 0.7 percent in the second quarter this year, a slightly better showing than the 1.1 percent originally estimated.
Last night, U.S. stocks turned in a lackluster performance, as traders seemed reluctant to continue buying without any official announcement on further stimulus measures. However, some better economic data on weekly jobless claims and trade balance helped to keep traders from cashing in on the recent gains. The Dow edged down 0.1 percent, while the tech-heavy Nasdaq rose 0.3 percent and the S&P 500 rose marginally.
by RTT Staff Writer
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