Asia: Markets start week on cautious note

[HONG KONG] Asian markets were largely flat on Monday morning following weak US trading at the end of last week and as nervousness over Chinese growth put pressure on global equities.

After early gains, Hong Kong hovered between positive and negative territory, edging up 0.2 per cent by mid-morning.

Tokyo and Shanghai stocks were largely unchanged, with Tokyo trading down by 0.1 per cent.

"Flagging growth in China revived global growth concerns," Stephen Innes, head of trading for Asia-Pacific at Oanda.

"Specifically, it was Friday's China factory gate inflation wobble that is weighing on global equities and commodities alike."

China's economy will be in the spotlight this week, with key monthly data expected Wednesday and stocks tumbling last week on mounting concerns of a slowdown.

Chinese ecommerce giant Alibaba took a record US$30.7 billion in orders on Sunday during its annual "Singles Day" shopping frenzy.

However sales growth slowed to 27 per cent this year from 39 per cent growth in 2017, adding to mounting concerns over the outlook for the Asian powerhouse.

"But where we can get some comfort from this number is that Chinese consumers are slowing, not collapsing," Junheng Li, founder of JL Warren Capital LLC, told Bloomberg News.

China's banking stocks were seeing mixed performance Monday after the government gave new guidance on requirements for banks to lend to private companies. Last week bank shares dropped as investors balked at what were seen as unprecedented government demands on lenders.

The Industrial & Commercial Bank of China (ICBC) was up 0.2 per cent in Hong Kong, while the China Construction Bank lost 0.1 per cent.

OIL RALLIES

Markets across Asia were cautious through the morning, with Taiwan up 0.2 per cent, Seoul edging down 0.3 per cent, and Sydney up 0.1 per cent.

There was some relief on the oil markets following last week's slump, after a key meeting of oil producers took place in Abu Dhabi at the weekend.

The Opec group and its allies started laying the groundwork to cut supply in 2019, reversing an almost year-long expansion.

Khalid al-Falih, energy minister of the world's top supplier Saudi Arabia, said the kingdom would cut its production by 500,000 barrels per day.

Oil prices rallied Monday morning, with both Brent Crude and WTI seeing gains.

Mr Innes said it was in Opec's "best interests to tame the current supply glut" as "oil prices above US$80 are never welcome by Opec customers".

Last week, higher US energy stockpiles drove benchmark WTI crude to its longest losing streak in more than 30 years, while Brent Crude dropped below US$70 a barrel for the first time since April.

AFP