Asian shares tumble on poor Chinese trade data

The Shanghai Composite index dived 4.4 per cent to 2,969.86 and Hong Kong’s Hang Seng lost 1.7 per cent to 28,296.46. The People’s Insurance Company (Group) of China Ltd. plunged 10 per cent in early trading, its daily limit. (Pexels photo)

SINGAPORE — Shares tumbled Friday in Asia, led by sharp declines in Shanghai and Hong Kong, after China reported its exports plunged more than 20 per cent in February from a year earlier.

Selling also was fueled by worries that the U.S. and China may not be as close to a trade deal as President Donald Trump has suggested.

The Shanghai Composite index dived 4.4 per cent to 2,969.86 and Hong Kong’s Hang Seng lost 1.7 per cent to 28,296.46. The People’s Insurance Company (Group) of China Ltd. plunged 10 per cent in early trading, its daily limit.

South Korea’s Kospi fell 1.3 per cent to 2,137.44 and Australia’s S&P/ASX 200 eased 1 per cent to 6,203.80.

Japan’s benchmark Nikkei 225 sank 2 per cent to 21,025.56, even after the government said its economy grew 1.9 per cent in 2018’s fourth quarter, from a year ago. This was better than the initial estimate of 1.4 per cent. Stocks fell in Taiwan and throughout Southeast Asia.

China’s exports fell by 20.7 per cent in February from a year earlier, customs data showed Friday. This was far worse than the expected 4.8 decline. The country’s imports missed the mark too, dropping 5.2 per cent in February, as compared to a 1.5 per cent easing in the previous month.

While the Lunar New Year holidays may have contributed to the fall, the latest trade data was taken as a sign that the Chinese economy was slowing down.

The Chinese data fueled worries about the softening global economy. On Thursday, the European Central Bank delayed its next interest rate hike and announced a new round of cheap loans for banks. This was seen as an acknowledgement of weaker growth by the bank.

“The series of aggravating factors for growth concerns continues to gather… setting Asia markets up for a synchronized decline into the end of the week,” Jingyi Pan of IG said in a commentary.

On Thursday, The New York Times reported that the U.S. and China have reached a broad agreement on removing some tariffs in both countries. This involves China buying more American goods and opening some of its markets further to foreign companies, it said.

But the report said negotiators haven’t locked down key details, like when the tariffs will be removed and how to ensure China holds up its end of the deal. It added, citing two people familiar with Beijing’s position, that Chinese officials were wary about the final terms due to Trump’s proclivity for last minute-changes.

Trump told reporters Wednesday that the negotiations were “moving along very nicely.” Last week, the U.S. shelved a tariff hike on $200 billion in Chinese goods to give officials time to work out a deal.

Overnight on Wall Street, the broad S&P 500 index suffered its fourth straight loss on Thursday, falling 0.8 per cent to 2,748.93. The Dow Jones Industrial Average declined 0.8 per cent to 25,473.23 and the Nasdaq composite shed 1.1 per cent to 7,421.46. The Russell 2000 index of smaller company stocks dipped 0.9 per cent to 1,523.63.

ENERGY: U.S. crude lost 44 cents to $56.22 a barrel in electronic trading on the New York Mercantile Exchange. It picked up 44 cents to $56.66 a barrel on Thursday. Brent crude, used to price international oils fell 60 cents to $65.70 a barrel in London. The contract rose 31 cents to settle at $66.30 per barrel on Thursday.

CURRENCIES: The dollar weakened to 111.00 yen from 111.57 yen late Thursday. The euro advanced to $1.1203 from $1.1194.