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Asian Shares Tumble After Mixed Chinese Data

stockmarkets dec17 16jul20 lt

Asian stocks fell on Thursday as investors fretted about a second wave of coronavirus infections and the reimposition of lockdowns in the wake of fresh spikes in infections in the United States, Australia and Japan.

U.S.-China tensions also remained on investors' radar. U.S. Secretary of State Mike Pompeo said the U.S. would impose visa restrictions on Chinese firms like Huawei Technologies that he accused of facilitating human rights violations.

China reported better-than-expected second quarter growth, but a worse than expected drop in retail sales in June suggested consumers are still reticent about spending.

Chinese stocks led regional losses as renewed U.S.-China tensions overshadowed encouraging GDP data. The benchmark Shanghai Composite Index plunged 151.21 points, or 4.5 percent, to 3,210.10, marking the sharpest single-day loss in more than five months. Hong Kong's Hang Seng Index ended down 2 percent at 24,970.69.

China's gross domestic product surged a seasonally adjusted 11.5 percent sequentially in the second quarter of 2020, the National Bureau of Statistics said today, beating expectations for a gain of 9.6 percent following the 9.8 percent decline in the previous three months.

On a yearly basis, GDP advanced 3.2 percent - again topping forecasts for an increase of 2.5 percent after tumbling 6.8 percent in the three months prior.

The bureau also said that industrial production gained 4.8 percent year-over-year in June, beating forecasts for 4.7 percent and up from 4.4 percent in May.

Meanwhile, retail sales fell an annual 1.8 percent in June compared to expectations for a gain of 0.3 percent after slumping 2.8 percent in the previous month.

Fixed asset investment was down an annual 3.1 percent, beating forecasts for a fall of 3.3 percent after sinking 6.3 percent a month earlier. House prices in China were up 4.9 percent year-over-year in June, unchanged from the previous month.

Japanese stocks declined after Tokyo Governor Yuriko Koike warned of a record number of daily coronavirus infections. The Nikkei 225 Index fell 175.14 points, or 0.8 percent, to 22,770.36 after hitting a one-month high the previous day. The broader Topix closed 0.7 percent lower at 1,579.06.

Tech stocks succumbed to selling pressure, with Advantest, Tokyo Electron and Screen Holdings losing 3-4 percent.

Murata Manufacturing lost 2.8 percent. The company said one of its production units was temporarily closed after an employee tested positive for the coronavirus.

Australian markets gave up early gains to end notably lower as virus fears lingered and data showed the country's unemployment rate rose to a two-decade high in June.

The jobless rate came in at a seasonally adjusted 7.4 percent in June, in line with forecasts and up from 7.1 percent in the previous month. The Australian economy gained 210,800 jobs in the month, blowing past expectations for the addition of 112,500 jobs following the loss of 227,700 jobs in May.

Australia's two most populous states will impose harsher rules on movement if a Covid-19 outbreak is not brought under control, state premiers said on Wednesday.

The benchmark S&P/ASX 200 Index dropped 42 points or 0.7 percent to 6,010.90, while the broader All Ordinaries Index ended down 37.40 points or 0.6 percent at 6,123.

Mining heavyweights BHP and Rio Tinto fell 0.6 percent and 1.4 percent, respectively. Alumina rallied 2.4 percent after its joint venture with Alcoa achieved record quarterly daily alumina production.

Gold miners Evolution, Newcrest, Northern Star Resources and Regis Resources dropped 1-2 percent. Energy stocks turned in a mixed performance. Woodside Petroleum, Origin Energy and Santos declined between 1.4 percent and 2.2 percent, while Beach Energy rose 1 percent and Oil Search advanced 1.3 percent.

Banks ANZ, NAB and Westpac fell between 0.6 percent and 1 percent. Michael Hill soared 6.6 percent. The jewelry group reported a 4.1 percent decrease in fourth-quarter sales and said it has closed seven stores in Victoria due to a six-week lockdown.

Seoul stocks retreated after the Bank of Korea's monetary policy board voted to leave its benchmark lending rate unchanged at a record low 0.50 percent and said it expects the economy to contract this year by more than it forecast in May. The benchmark Kospi slid 18.12 points, or 0.8 percent, to 2,183.76.

The decision was in line with expectations following the bank's 25 basis point cut on May 28. It had executed an emergency 50 basis point cut on March 16 to combat the economic damage that resulted from the Covid-19 pandemic.

New Zealand shares ended lower after data showed consumer prices in the country fell by the most in four years last quarter amid a stalling economy due to the coronavirus. The benchmark NZX-50 Index surrendered early gains to end the session down 105.46 points, or 0.9 percent, at 11,505.06, snapping a three-day winning streak.

U.S. stocks fluctuated before ending mostly higher overnight as upbeat news on the coronavirus vaccine front, encouraging industrial production data and a blockbuster earnings report from Goldman Sachs helped traders shrug off news of a record single-day spike in new Covid-19 cases in the U.S.

The Dow Jones Industrial Average and the S&P 500 both rose about 0.9 percent to close at their best closing levels in over a month, while the tech-heavy Nasdaq Composite Index gained 0.6 percent.

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