Asian stocks saw a mixed day on Tuesday with more poor data out of China dampening the mood on many trading floors while a strong dollar boosted exporters across the region.
There was also an air of caution ahead of key inflation readings from China and the United States due out later this week.
That hesitancy was evident in Tokyo where Japan’s Nikkei share average rose, buoyed by the gains in US stocks overnight and a weaker yen boost for exporters, but saw traders holding back as the peak for the domestic earnings season approaches.
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The Nikkei added 0.38% to end the day at 32,377.29 after a quiet afternoon session. Of the Nikkei’s 225 components, 164 rose, 58 fell and three were flat. The broader Topix gained 0.34% to 2,291.
More than 400 companies report earnings on Wednesday, with that number more than doubling to around 850 on Thursday.
China stocks slipped after the country’s July exports and imports contracted more than expected. Hong Kong shares were down, led by property stocks.
China’s exports fell 14.5% in July year-on-year, while imports contracted 12.4%, customs data showed on Tuesday, in the worst showing for outbound shipments from the world’s second-largest economy since February 2020.
The Shanghai Composite Index fell 0.25%, or 8.21 points, to 3,260.62, while the Shenzhen Composite Index on China’s second exchange lost 0.33%, or 6.80 points, to 2,051.03.
Meanwhile, mainland property developers traded in Hong Kong slumped 4.4%, with Longfor Group plunging 9.1% and Country Garden dropping 14.4% after missing two bond coupon payments on Sunday.
Tech giants listed in Hong Kong lost 2.1% and the Hang Seng Index dropped 1.81%, or 353.75 points, to 19,184.17.
Elsewhere across the region, Seoul, Wellington, Taipei, Manila, Mumbai and Bangkok all dropped. Sydney barely moved but there were gains in Singapore and Jakarta.
Yuan Slips, Dollar Gains
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.7%, after US stocks ended the previous session with mild gains. The index is down 2.9% so far this month.
In early European trades, pan-region Euro Stoxx 50 futures were down 0.11% at 4,352, German DAX futures were down 0.08% at 15,998, and FTSE futures were down 0.13% at 7,530. US stock futures, the S&P 500 e-minis, were down 0.21% at 4,528.3.
In the forex markets, the offshore yuan fell to a more than two-week low of 7.2334 per dollar, while its onshore counterpart similarly bottomed at an over two-week low of 7.2223 per dollar.
The European single currency was down 0.1% on the day at $1.1002 while the dollar index, which tracks the greenback against a basket of currencies of major trading partners, was up at 102.24.
The dollar rose 0.46% against the yen at 143.15. It is still some distance from its high this year of 145.07, hit on June 30.
The yield on benchmark 10-year Treasury notes rose to 4.0442% compared with its US close of 4.078% on Monday. The two-year yield, which rises with traders’ expectations of higher Federal Reserve fund rates, touched 4.7598% compared with a US close of 4.758%.
China Stimulus Speculation
Global investors are keenly awaiting inflation readings from China on Wednesday and the US on Thursday, expecting them to show stark differences in price movement in the world’s two biggest economies.
US inflation likely accelerated slightly in July to an annual 3.3%, while the core rate was likely unchanged at 4.8%, according to a Reuters poll of economists. ANZ predicts China’s July consumer price index to come in at minus 0.4% year-on-year.
The prospect of economic stimulus from China’s central government to reinvigorate a soft economy is still being contemplated by investors. Minor measures to help property markets have been delivered in the past fortnight, but no broad stimulus has been outlined.
US crude ticked up 0.21% to $82.11 a barrel. Brent crude rose to $85.46 per barrel. Gold was slightly lower with the spot price at $1934.1667 per ounce.
Key figures
Tokyo – Nikkei 225 > UP 0.38% at 32,377.29 (close)
Hong Kong – Hang Seng Index < DOWN 1.81% at 19,184.17 (close)
Shanghai – Composite < DOWN 0.25% at 3,260.62 (close)
London – FTSE 100 < DOWN 0.37% at 7,526.69 (0933 BST)
New York – Dow > UP 1.16% at 35,473.13 (Monday close)
- Reuters with additional editing by Sean O’Meara
NOTE: The text was amended on August 8, 2023 to correct the size of the share fall suffered by Country Garden.
Read more:
China’s Trade to the US and EU Sank Further in July, Data Shows
US Curbs on Investments in Critical China Tech Likely This Week
Hang Seng Flat on Stimulus Doubts, Nikkei Gains on Earnings
