Hong Kong: Markets across Asia are trading down after China trade data signalled that the world’s second largest economy isn’t holding up in the face of a slowdown in its principal export markets.
China’s imports in July rose by 4.7 percent, less than expected; likewise, exports grew by 1 percent against the expected 8 percent. Overall trade surplus came in $25.1 billion, well below expectations.
As at 7.30 am IST, Nifty futures are trading marginally down, but with a negative bias, largely driven by the abysmal industrial production data on Thursday and weak corporate numbers in India.
Elsewhere across the region, indices, which were weak at the start, fell marginally after the Chinese trade data came in. Investor sentiment is generally weak, with stocks exposed to the global trade supply chain doing particularly badly. Tokyo’s Nikkei index and Hong Kong’s Hang Seng index are down by six-tenths of 1 percent and four-tenths of 1 percent respectively. Shanghai, surprisingly, is holding up slightly better and is trading about flat.
Overnight, Wall Street had a pretty tame day, and finished unspectacularly in the absence of news triggers. Only the widespread expectation of some form of monetary stimulus.
Back home, investors are still reeling from the impact of yesterday’s IIP data. The index for capital goods was particularly bad, down 28 percent year-on-year. Worse, analysts reckon there are no hopes of an early turnaround, given production disruptions, and power outage problems.
But it has also led analysts to believe that the weakness in the economy is serious enough to require the RBI to step up and cut repo rates by 1 percent over the rest of the financial year.
For today, we’ll likely see a weak start.