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Asian markets drop as China imports slow

Asian markets drop as China imports slow
AP
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First Published: Tue, Aug 10 2010. 10 45 AM IST
Updated: Tue, Aug 10 2010. 10 45 AM IST
Bangkok: Asian markets slid Tuesday on signs China’s economy continues to slow and ahead of a US Federal Reserve meeting that may bring new measures to prop up sputtering US growth.
Stocks in Shanghai led declines in Asia after China’s July trade figures showed a big drop in the growth rate for imports, an indication that rapid expansion in the world’s No. 3 economy is cooling.
That dampened sentiment across the region, dragging most markets into the red. Weakness in China’s demand for imports could dent its ability to help to drive a global recovery amid Europe’s debt crisis and slack sales elsewhere.
Investors are also waiting for the outcome later Tuesday of the Federal Reserve’s policy meeting.
The US central bank is expected to keep interest rates unchanged at a record-low level and investors are speculating it will announce new quantitative easing measures, market jargon for pumping more money into the economy, to reinvigorate a sputtering recovery.
“Whether Fed policymakers oblige the markets or not only time will tell. Though the markets may welcome such a move, it will only confirm that the US has hit a soft patch. And that will not be good news,” investment house India Infoline said in a report.
The Shanghai Composite Index tumbled 48.74 points, or 1.8%, to 2,623.79 after the government announced growth in imports for July slowed to 22.7% from 53% in June. Exports, meanwhile, continued to grow strongly.
Strength in the yen hurt shares of Japanese exporters, with the Nikkei 225 stock average off 34.09, or 0.4%, at 9,538.20.
South Korea’s Kospi shed 0.4% to 1,782.85, Australia’s S&P/ASX 200 dropped 1% to 4,548.30 and Hong Kong’s Hang Seng retreated 1% to 21,580.59.
Markets in Taiwan, India, Singapore and Indonesia also fell while benchmarks in the Philippines and Malaysia rose.
Shares ended higher overnight on Wall Street, but volume was low as investors awaited the Fed’s assessment of the US economy and any plans to resume stimulus measures.
In the US on Monday, the Dow Jones industrial average ended 0.4% higher at 10,698.75. The broader Standard & Poor’s 500 index gained 0.6% to 1,127.79.
In currencies, the dollar slipped to 85.81 yen from 85.92 yen in New York late Monday. The euro dropped to $1.3143 from $1.3215.
Benchmark crude for September delivery was down 39 cents at $81.09 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 78 cents to settle at $81.48 on Monday.
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First Published: Tue, Aug 10 2010. 10 45 AM IST
More Topics: Stocks | Shares | Markest | China | Asia |