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Stock market today: Asian shares turn lower after weak China economic data

AP – Asian shares were mostly higher yesterday even though the latest data showed China’s economy is weaker than expected, with domestic demand failing to bounce back as much as hoped for after the pandemic. Benchmarks advanced in Tokyo, Hong Kong and Seoul but fell in Shanghai and Sydney.

China’s economic recovery after the pandemic faces pressure from sluggish consumer and export demand, a government official said yesterday, with retail sales and other activity in April weaker than expected. Retail sales rose 18.4 per cent over a year earlier, up 7.8 percentage points from March, official data showed. Other indicators were mixed: Factory output rose 5.6 per cent over a year ago but was off 0.5 per cent from March. Investment in factories, real estate and other fixed assets was up 4.7 per cent in the first four months of 2023, but that was off 0.4 percentage points from the first quarter’s growth rate. “Today’s activity data suggest China is mired in an extended soft patch,” said Stephen Innes of SPI Asset Management in a report.

Julian Evans-Pritchard of Capital Economics said the post-pandemic recovery was likely to “fizzle out” in the second half of the year. “Meanwhile, the challenging global picture will prevent much pick-up in Chinese exports,” he said.

Tokyo’s Nikkei 225 index surged 0.7 per cent to 29,842.99, continuing a climb toward its highest level since the early 1990s that has been helped by strong corporate earnings and signs that inflationary pressures might be easing. The Hang Seng in Hong Kong fell 0.2 per cent to 19,945.86, while the Shanghai Composite index lost 0.5 per cent to 3,292.99.

In Seoul, the Kospi edged 0.1 per cent lower, 2,477.14, while Australia’s S&P/ASX 200 slipped 0.4 per cent to 7,240.90. On Monday, the S&P 500 rose 0.3 per cent to 4,136.28 and the Dow Jones Industrial Average edged 0.1 per cent higher, to 33,348.60. The Nasdaq composite climbed 0.7 per cent to 12,365.21. Some of the sharper moves came from companies announcing takeovers of rivals, including a 9.1 per cent drop for energy company Oneok after it said it’s buying Magellan Midstream Partners. Magellan jumped 13 per cent.

But market was relatively quiet as several concerns dragged on sentiment. A chief one is the fear of a recession hitting later this year, mainly because of high interest rates meant to knock down inflation. Cracks in the United States (US) banking system and the US government’s inching toward a possible default on its debt as soon as June 1 are added worries.

So far, a resilient job market has helped US households keep up their spending despite all the pressures. That in turn has offered a powerful pillar to prop up the economy. Yesterday, the government showed how much sales at retailers across the country grew last month.

Several big retailers – Home Depot yesterday, Target today and Walmart tomorrow – will give updates on their earnings in the first quarter of the year.

A person rides a moped in front of an electronic stock board showing Japan’s Nikkei 225 index at a securities firm. PHOTO: AP
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