The Business Times

Asian markets sink further on global economy fears

Published Mon, Oct 13, 2014 · 07:14 AM

[Hong Kong] Asian markets suffered fresh selling pressure on Monday, while the dollar dipped and oil hit multi-year lows, following another round of losses on Wall Street fuelled by global growth concerns.

Hong Kong and Shanghai pared initial heavy losses as traders digested data showing a better-than-expected rise in Chinese exports and imports.

Investors are also warily watching events in Hong Kong as clashes erupted in the city between pro-democracy protesters and masked men, hours after police began removing barricades that have blocked some main roads for the past two weeks.

Hong Kong was 0.50 per cent lower in the afternoon while Shanghai was down 0.51 per cent.

Sydney gave up 0.63 per cent, or 32.8 points, to close at 5,155.5 and Seoul ended 0.71 per cent lower, easing 13.71 points to 1,927.21.

Tokyo was closed for a public holiday.

Global markets have felt the effect in recent weeks as traders fret over the state of the global economy, with China, the eurozone and Japan struggling even though the United States is clawing its way back to health.

The latest indicators on the global outlook came from Beijing Monday, with official data showing September exports rose 15.3 per cent year-on-year and imports climbed 7.0 per cent.

The rise in exports accelerated from August's 9.4 per cent and was ahead of the median forecast of 12.5 per cent. The forecast had predicted a fall of 2.4 per cent in imports, matching a surprise decline in August.

Customs spokesman Zheng Yuesheng attributed the improvement to a recovery in major economies and a strengthening of external demand.

"The good momentum is expected to continue in the fourth quarter," he added.

But while the figures beat expectations, traders are still worried about the strength of world's number-two economy, which is a key driver of global and regional growth.

Desmond Chua, market analyst at CMC Markets, told Dow Jones Newswires the data "was a lot more disappointing than we had expected" and "cements the view that China might be in for quite a hard landing".

On currency markets, the dollar eased to 107.35 yen from 107.65 yen in New York Friday, while the euro was at US$1.2668 against US$1.2627.

The single currency was also at 136.00 yen, from 135.97 yen.

The yen, which is considered a safe bet in times of turmoil, has rallied in the past as equities markets have fallen.

Wall Street's three main indexes ended in the red on Friday. The Dow fell 0.69 per cent, the S&P 500 tumbled 1.15 per cent and the Nasdaq slumped 2.33 per cent.

In Hong Kong dozens of masked men rushed barricades at the main pro-democracy site Monday, triggering clashes as demonstrators tried to push them back and police struggled to contain the chaos.

Groups of men, many wearing surgical masks, descended on the front lines of the rally at Admiralty near the central business district, hours after police had moved in to remove some barricades and shrink the site.

Taxi drivers, many of whom have voiced frustration with more than two weeks of protests which have blocked roads and caused traffic gridlock, added to the fray by converging on the site - beeping horns and shouting at demonstrators.

While the Hang Seng initially tumbled in response to the protests which began late-September, it recovered most of its losses as tensions cooled despite the city's partial shutdown.

Oil prices tumbled again on pessimism about demand. US benchmark West Texas Intermediate for November delivery fell US$1.23 to US$84.59 - its weakest for two years - while Brent North Sea crude lost US$1.24 to a four-year low of US$88.97.

Gold was at US$1,233.38 an ounce against US$1,222.00 late Friday.

In other markets: - Taipei tumbled 2.84 per cent, or 255.05 points, to 8,711.39.

Taiwan Semiconductor Manufacturing Co shed 3.6 per cent to Tw$120.5 while leading chip design house MediaTek lost 4.05 per cent to Tw$403.0.

Wellington fell 1.05 per cent, or 55.09 points, to 5,170.05.

Air New Zealand closed down 2.13 per cent at NZ$1.84 and Fletcher Building was off 0.57 per cent at NZ$8.67.



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