Singapore / Sydney: Asian stocks and US futures retreated after China’s industrial production slowed, Australia’s jobless rate rose and Japanese government data confirmed its economy shrank the most since 1974.
China’s output growth slipped to 3.8% in January and February. In Japan, the government confirmed gross domestic product (GDP) fell last quarter by the most since the 1970s oil shock.
The global economy is weakening in such a highly synchronized way that everybody is affected, said Stephen Halmarick, Sydney-based head of Investment Markets Research Colonial First State Global Management that manages about $84 billion. “I’d still be cautious on Asian economies.”
Japan’s Nikkei 225 Stock Average lost 2.4% to close at 7,198.25. Most markets in Asia declined except for those in South Korea, India and Pakistan. MSCI’s Asian index has slumped 19% this year, extending last year’s record 43% drop as the global recession decimated company profits. Reported earnings for companies in the index have fallen by about half from a year ago, according to data compiled by Bloomberg.
China’s industrial-production growth slowed in the first two months of the year as exports slid at a record pace, while bank lending jumped as the nation’s 4 trillion yuan ($585 billion) stimulus began to take effect. Chinese Premier Wen Jiabao reiterated last week the government’s pledge to significantly increase investment in 2009.
Governments have stepped up efforts to avert what the World Bank predicts will be the first global economic contraction since World War II.
Gross domestic product in Japan shrank an annualized 12.1% in the three months ended 31 December, government figures on Thursday showed, as exports, output and business spending collapsed. The figure was less than the 12.7% reported last month.
The Japan Bank for International Cooperation said it has received requests for emergency loans totalling as much as $40 billion since the end of 2008, almost four times its original budget for the fiscal year that ends March 31.
Not just auto makers, but electrical and chip companies, and also other manufacturers, are coming to us in large numbers, Hiroshi Watanabe, chief executive officer of the Tokyo-based JBIC, said in a March 10 interview.