The soft data out of China and the weakness in oil prices were just reminders that inflation is not any problem which fed into the opinion that the US central bank would be in no hurry to increase its rates.
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ASIA: Japan’s Nikkei 225 fell 1.1 percent and South Korea’s Kospi was down 0.1 percent.
The Shanghai Composite Index closed slightly higher, up 0.17pc.
In Hong Kong, the Hang Seng index dropped 0.6 percent, to 22,470.84 points, and the Hong Kong China Enterprises Index lost 0.5 percent, to 10,390.56.
The most worrying aspect of the Chinese data was the 20.4% drop in imports, which points to further suffering for the countries trading partners in the region.
ANALYST’S TAKE: “Some paring of risk appetite in the overnight markets will set the cautious tone in Asia”, said Bernard Aw, a market strategist at IG in Singapore. “This brings up concerns about how China is going to start pulling growth together as we approach the deadline for its 7% [gross domestic product] target” for year-end, he added.
And on Wednesday official figures showed inflation weakened last month from August, while the prices paid at factory gates – a key gauge of demand in the economy – remained unchanged at a six-year low.
World markets suffered their worst quarter for four years in July-September owing to fears about the effects of China’s growth slowdown as well as speculation the Fed would hike rates.
The latest Chinese data has fueled expectations of further easing. The reaction to today’s release suggests people are continuing to push back interest rate hike expectations for the United Kingdom, with a few suggesting it won’t come until the end of next year at the earliest. That would be on top of five interest rate cuts and three reductions to the reserve requirement ratio since November.
Most analysts expected the authority would move more aggressively to address slowing growth and falling prices by lowering the midpoint of the currency’s managed trading band. But stocks in Singapore were higher after preliminary data showed the country narrowly avoided a recession in the third quarter.
Indonesia’s Jakarta Composite Index fell 2.6 per cent, heading for the steepest retreat in a month, as banking shares fell after regulators published a draft plan to impose capital surcharges on major lenders. The U.S.-listed stock of AB InBev, which makes Budweiser, Corona and Stella Artois, rose $2.31, or 2.1 percent, to $113.80.
New Zealand’s benchmark S&P/NZX 50 index rose 0.36% to 5,710.04 points this afternoon in Wellington. Malaysian and Indonesian markets were shut for holidays.
Index heavyweights were among those weighing on the Tokyo bourse in early trade; Fast Retailing (Tokyo Stock Exchange: 9983.T-JP) declined 3.9 percent, while SoftBank (Tokyo Stock Exchange: 9984.T-JP) and Fanuc (Tokyo Stock Exchange: 6954.T-JP) fell 1.9 and 2.7 percent respectively.
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Oil prices were subdued in volatile trade after the worldwide Energy Agency warned in a report that a global crude oversupply will persist until next year, hammering demand.
