Markets in Asia fell Wednesday after disappointing economic data from China stoked worries about whether the world’s second largest economy can meet its year-end growth target.
The Nikkei 225 index plummeted 343.74 points, or 1.9%, to 17,891
The Hang Seng index in Hong Kong fell 160.55 points, or 0.7%, to 22,439.91
The Singaporean dollar gained the most of currencies in the region, last up more than 1% against the U.S. dollar. While the gains follow authorities’ decision to ease currency policy, the moves weren’t as aggressive as expected and followed improving growth data.
The Monetary Authority of Singapore said earlier Wednesday that it would target a slower appreciation of the Singapore dollar against a basket of currencies, in light of a softer outlook for the global economy. The city-state uses a managed exchange rate—rather than interest rates—as its main monetary policy tool.
Separately, Singapore’s trade ministry reported brighter-then-expected growth figures: The nation’s economy grew 0.1% on year on a seasonally adjusted basis, narrowly missing a technical recession, compared with a 2.5% contraction in the second quarter. A recession is defined as two consecutive quarters of shrinking growth.
CHINA
The CSI 300 in Shanghai shed 38.93 points, or 1.1%, to 3,306.11
The broad losses follow reports that the pace of price increases in China moderated in September. China’s consumer-price index rose 1.6% on year during September compared with a 2.0% rise in August. The producer-price index dropped 5.9% in September from a year earlier, marking the 43rd consecutive month of deflation.
The inflation data adds to a report Tuesday showing China’s exports and imports falling in September. Concerns about China’s slowdown in August helped spark a selloff in stocks around the world, and sharp swings continued through last month.
Shares in Shanghai turned positive in the late morning, as investors weighed the likelihood of further stimulus from Beijing to support the economy. IG said it expects China both to cut interest rates and the amount of reserves banks are required to hold at least once more before year-end. That would be on top of five interest rate cuts and three reductions to the reserve requirement ratio since November.
Pressure on the mainland market built after local media reported the chief economist at the People’s Bank of China, Ma Jun, had denied the central bank’s weekend move to boost bank lending was China’s version of quantitative easing.
The latest measure from the central bank expands an unconventional measure to let more commercial lenders use loans as collateral to borrow cheaply from it. Wednesday’s losses broke a five-day rally that had helped take the Shanghai benchmark up nearly 12% as of the previous day from its August low.
Meanwhile, the central bank set its yuan weaker against the U.S. dollar in the morning for the first time in eight days. The onshore Chinese yuan was last at 6.3462 to one U.S. dollar, near unchanged from the previous day.
In other markets
The Kospi index in Korea erased 9.5 points, or 0.5%, to 2,009.55
Taiwan’s Taiex index gave back 45.41 points, or 0.5%, to 8,552.51
In Singapore, the Straits Times Index docked 0.96 points to 2,983.92
The NZX 50 gained 24.31 points, or 0.4%, to 5,727.13
The ASX 200 Index slipped 5.6 points, or 0.1%, to 5,197.25
