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Asia stocks fall against background of Japan slowdown

 

Ap
Monday 13 August 2012 07:20 BST
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Asian stock markets fell today after a slowdown in Japan's growth gave investors another reason to worry about the health of the global economy.

Japan released data showing the economy grew at a slower-than-expected annual rate of 1.4% in April-June as Europe's debt crisis and the strong yen weighed on the country's powerhouse export sector.

That was a sharp drop from a revised 5.5% in the previous quarter.

The news comes on top a slew of reports from Asia which point to a region losing momentum.

On Friday, China released weaker-than-expected trade data. Export growth in July plunged to just 1% from the previous month's 11.3%, well below forecasts of about 5%.

Hong Kong and Singapore, both highly exposed to global trade, reported weak second-quarter growth, and India's industrial output fell a worse-than-expected 1.8% in June amid a manufacturing and investment slump.

Japan's Nikkei 225 was flat at 8,891.90, Hong Kong's Hang Seng fell 0.2% to 20,099.86, and South Korea's Kospi lost 0.6% to 1,934.96.

Shares in mainland China and the Philippines also fell. Australia's S&P/ASX 200 bucked the trend, rising 0.3% to 4,290.90.

Stan Shamu of IG Markets in Melbourne said investors remained frustrated by slowing export growth out of China, which also reported a less-than-expected decline in inflation on Friday.

But the dismal report helped fuel speculation that China's central bank was preparing to act with some type of measure to spur business activity.

Mr Shamu said that "easing talk is likely to ramp up over coming sessions and this could support markets and limit downside".

Even though it came on the heels of a raft of bad economic news, Japan's growth figures were taken in stride.

"The market has become accustomed to mild disappointment," said Benjamin Collett at Louis Capital Markets in Hong Kong.

Japan's export sector continues to be thrashed by a stubbornly strong yen. Mazda lost 1.1% and Isuzu lost 1%.

Elsewhere, Australia's Newcrest Mining jumped 3.8% after reporting its full-year profit rose 23% due to rising gold prices. JB Hi-Fi soared 7.8% after the Australian retailer said it expected sales to grow in the year ahead.

Chinese construction shares fell. Shanghai-listed Fujian Cement fell 3.5%, Hong Kong-listed China National Building Material lost 1.2%, and Poly Real Estate Group fell 3.4% in Hong Kong.

Benchmark oil for September delivery was up 52 cents to 93.40 US dollars per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 49 cents to end at 92.87 dollars per barrel in New York on Friday.

AP

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