In the United States on Friday the S&P 500 and Dow Jones Industrial Index edged higher after official non-farm payrolls data showed a bigger than expected improvement in employment in the world's biggest economy. But the positive lead from the US was overshadowed after China reported the biggest drop in exports since the global financial crisis and inflation slowed to a 13-month low.
The sharp slump in the Asia Pacific equities were mainly attributed to China's February customs data released on Saturday that showed the first trade deficit in 11 months, which contrasted with the huge surpluses last February and this January. In addition, the country's producer price index, which measures inflation at the wholesale level, contracted for 24 consecutive months in February, further compounding the gloomy outlook among investors.
Also, the latest Japanese gross domestic product (GDP) figures further dented trading sentiment across the region. The Cabinet Office revised its real gross domestic product growth to an annual pace of 0.7%, lower than its initial 1%. It said that both private and public demand was lower than it had estimated last month, including lower levels for private consumption and public investment.
Japan's current account deficit totalled 1.589 trillion yen ($15 billion), the biggest for January since comparable records began in 1985, according to the Finance Ministry.
Among key Asian bourses, Australian stock market declined steeply, as wave of profit taking across the board, with materials and resources stocks led losses on tracking steep plunge in commodity prices in the international markets. The benchmark S&P/ASX 200 index declined 50.80 points, or 0.93%, to 5411.50. The broader All Ordinaries sank 46.20 points, or 0.84%, to 5430.80.
Shares of material sector tumbled the most in the Australian market, as commodity prices dropped on worries about the Chinese economy. The spot price for iron ore, landed in China, lost 2.3% to an eight month low of $US114.20 a tonne, while Shanghai copper futures plunged to the lowest level since September 2009. Resources giant BHP Billiton shed 4.1% to A$36.16. Rio Tinto, Australia's biggest iron ore miner, lost 5.8% to A$61.20, while the third force in iron ore, Fortescue Metals Group, fell 9.4% to A$4.92. Junior iron ore miners, notably Arrium sank 10.6% to A$1.345 and Atlas Iron fell 10.1% to A$0.93.
Energy stocks were mostly lower as Brent crude oil fell to $US108.43 a barrel. Among energy stocks, Origin Energy dropped 0.5% to A$38.71 but Woodside Petroleum closed 0.1% higher at A$38.71. Oil and gas developer Santos lost 1.8% to A$14.07 as the company suffered a major setback in its efforts to gain public acceptance for its plans to drill for coal seam gas in New South Wales after revelations of a lingering problem with uranium contamination in ground water in the Pilliga forest.
Construction and engineering contractor Leighton Holdings was the best-performing stock in the ASX 200, climbing 11.4% to A$23.09, after German company Hochtief Holdings moved to boost its stake in the company to almost 75% and take control of the board. The A$1.5 billion takeover bid values LEI at A$22.15 cash per share, with Hochtief to acquire three of every eight shares held by LEI shareholders.
In Japan, Key benchmark indices on the Japanese stock market snapped four sessions of rising streak, as investors withdrew profits off the table after the Cabinet Office lowered its economic growth estimate for the October-December quarter to 0.7% and the Finance Ministry data indicated Japan racked up a record current account deficit in January. The benchmark Nikkei-225 index declined 1.01% to 15120.14, while the Topix index of all first-section shares dropped 0.76% at 1227.61.
In China, Mainland China stock market stumbled, as risk aversion selloff across the counters after reports showed an unexpected slump in Chinese exports and as the People's Bank of China lowered the daily reference rate for the renminbi by 0.18%.
Data from the General Administration of Customs released Saturday showed China's exports fell 18.1% from a year earlier in February, following a 10.6% rise in January. Imports rose 10.1%, yielding a trade deficit of $23 billion for the month versus a surplus of $32 billion in January.
Meanwhile, China's consumer prices rose 2% in February from a year earlier, their slowest rate in 13 months, according to a statistics bureau report yesterday. Producer prices fell 2%, the most since July, extending the longest decline since 1999.
The People's Bank of China lowered the daily reference rate for the renminbi by 0.18% to 6.1312 per US dollar, the most since July 2012.
Among SSE sectors, all 10 sectors of the SSE index declined, with telecommunication sector was worst performer amongst the SSE sectoral peers, falling 4.6%, followed by consumer discretionary down 4.4%, information technology down 4.3%, materials down 3.9%, energy down 3.8%, industrials down 3.7%, financials down 3.2%, utilities down 2.9%, consumer staples down 2.1% and healthcare down 1.9%.
In Hong Kong, HK market declined sharply as wave of selling across the board on tracking steep fall in Mainland China A-share market and other regional indices. The benchmark index opened 321 points lower, and broke a number of important levels, namely 10-, 20-, 50- and 250-day moving average to finish at 22,464.
Among the HK 50 blue chips, all but one blue chips fell today, with Li & Fung (00494) edging up 0.4% to HK$10.06. China Merchants (00144) plunged 4.1% to HK$26.9, making it the largest blue-chip loser.
China Mobile (00941) slipped 3.2% to HK$71.05. Tencent (00700) softened 2.2% to HK$616.5.
Cement makers went lower, with China Resources Cement Holdings shares plunging 5.3% to HK$5.37 after reporting weaker than expected full-year profit. Anhui Conch Cement Co., the mainland's biggest producer of the material by market value, dropped 4% to HK$27.75. Property counters were also pressured. Henderson Land (00012) went down 3.2$ to HK$42.2. New World (00017) dropped 2.3% to HK$9.74.
In India, Key benchmark indices provisionally settled with tiny gains in what was a volatile trading session. The barometer index, the BSE Sensex, fell below the psychological 22,000 mark after hitting a record high above that level in intraday trade. The Sensex was provisionally up 10.40 points or 0.05%, up about 125 points from the day's low and off 95 points from the day's high.
Indian index heavyweight Reliance Industries (RIL) edged higher on reports that the company's KG-D6 block partner BP Plc has highlighted recent discoveries in two blocks as "potentially commercial". Capital goods stocks rose. L&T hit 52-week high after the company said its construction division won new orders worth Rs 2935 crore across various business segments in February and March 2014. Auto stocks rallied.
Elsewhere in the Asia Pacific region, Taiwan's Taiex index sank 0.56%. South Korea's KOSPI index fell 1.03%. New Zealand's NZX50 dropped 0.15%. Indonesia's Jakarta Composite Index fell 0.18%. Malaysia's KLSE Composite dropped 0.56%. Singapore's Straits Times index slipped 0.31%.
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