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Asia: Hong Kong, Shanghai down on China target as euro struggles
[HONG KONG] Hong Kong and Shanghai markets led a broad Asian sell-off on Thursday after China set tepid 2015 economic and trade growth targets, while the euro struggled to recover from 11-year lows ahead of a key European Central Bank meeting.
Wall Street provided a negative lead again despite an upbeat report on the state of the US economy and another round of healthy private-sector jobs growth.
Hong Kong fell 0.78 per cent and Shanghai lost 0.56 per cent, while Sydney slipped 0.26 per cent.
Tokyo added 0.22 per cent by lunch and Seoul was flat.
China's National People's Congress, the rubber-stamp legislature, opened with Premier Li Keqiang setting a growth target for this year of "approximately seven per cent", which would be the slowest in 25 years.
The goal, which comes after a 7.4 per cent rise in 2014, also comes as authorities look to set the world's number two economy on a more sustainable path after decades of breakneck growth.
Authorities also cut their trade growth target for this year to "around six percent" after missing its 7.5 per cent goal in 2014 for the third consecutive year.
Over the past several months a slew of data has indicated a slowdown in the economy, including on manufacturing, inflation and trade.
In a work report, Mr Li said China had been hit as the global economy faced headwinds, adding: "Downward pressure on China's economy has continued to mount, and we have faced an array of interwoven difficulties and challenges."
EYES ON ECB BOND SCHEME
Traders seemed to be unimpressed with news that China will link up the Shenzhen and Hong Kong stock exchanges on a trial basis as part of its financial sector reform.
The move follows a similar scheme between Hong Kong and Shanghai that started in November. However, while officials trumpeted that as opening up China's closeted stock markets to the outside world, it has met with tepid demand in both cities.
Regional investors are also keeping an eye on Europe, where the ECB will outline details of its bond-buying programme which is aimed at kickstarting the eurozone economy and fending off deflation.
The euro has suffered heavy selling as bank president Mario Draghi prepares to unveil the plan for the 60-billion-euros-a-month scheme, known as quantitative easing.
The single currency traded at US$1.1078 early Thursday against US$1.1080 late Wednesday in New York where it briefly fell to US$1.1062, its lowest level since September 2003.
It was also at 132.68 yen compared with 132.63 yen in New York and much lower than 133.68 yen earlier Wednesday in Asia.
The dollar fetched 119.82 yen against 119.70 yen in US trade.
"Clearly there looks to be an element of currency-market positioning ahead of the ECB decision," Philip Borkin, a senior economist in Auckland at ANZ Bank New Zealand, wrote in a client note, according to Bloomberg News.
"Beyond that, the global economy needs more than one engine, the US, to give it sustainability."
US markets ended lower for a second-straight session as dealers brushed off the Federal Reserve report showing the economy expanding moderately while payrolls company ADP said private firms hired more than 200,000 in February.
The Dow fell 0.58 per cent, the S&P 500 lost 0.44 per cent and the Nasdaq eased 0.26 per cent.
On oil markets US benchmark West Texas Intermediate for April delivery was up 20 cents to US$51.73 and Brent crude for April gained five cents to US$60.60 in morning trade.
Gold fetched US$1,202.21 against US$1,204.12 late Wednesday.