FRAYED NERVES: Oil prices at 12-year lows and the volatile start to 2016 in China’s stock and currency markets have unleashed a torrent of negativity among investors.
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Subsiding certainty in Mainland China’s administrative decisions has incited shareholders to panic and withdraw from the fiasco economy.
The data reflected the government’s stronger supports on economic growth and further rebalancing of the industrial growth structure, Sheng Songcheng, director of the bank’s statistical survey department, said at a news briefing. Export value came in at $224 billion and imports were recorded at $164 billion, widening the trade surplus to $60 billion in the month. The FTSE 100 index of leading British shares was 1.3 percent lower. The local currency has gained 2 per cent year-to-date, as turmoil in Chinese and global markets have sent investors to rush for safety. It was forecast to fall marginally to CNY 700 billion.
“The broader market tone is showing signs of tentative risk appetite, bolstered by continued stability in China’s exchange rate and reinforced by the release of better-than-feared trade figures out of China”, said Eric Theoret, currency strategist, at Scotiabank in Toronto.
China on Wednesday reported better-than-expected trade data in December, with exports in yuan-denominated terms posting an unexpected rise while an import slump moderated, according to Xinhua. “Furthermore, oil prices were under pressure once again, constraining any relief rally in energy and material stocks”.
The Shanghai Composite Index sank as much as 2.8 percent, falling more than 20 percent from its high last month and sinking below its closing low during the depths of a US$5 trillion rout in August past year.
New Zealand’s S&P/NZX 50 Index kicked off trading in the Asian region, rising 0.8 per cent as of 8.06am in Tokyo to erase its drop for the week.
North American stock markets began Wednesday’s trading session on a positive note but weakened.
Crude prices on Tuesday fell briefly below the $30 per barrel line in NY for the first time since December 2003 but they have since picked up after a private report showed USA supplies fell last week.
Elsewhere, Hong Kong’s Hang Seng Index was down 1.4 per cent, Australia’s S&P/ASX 200 fell 0.3 per cent and South Korea’s Kospi slipped 1.1 per cent.
China’s economic growth hit a 24-year low in 2014 and the country logged its worst economic performance since the global financial crisis in the third quarter of 2015, with gross domestic product (GDP) expanding 6.9%.
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The Indonesian rupiah strengthened 0.1 per cent to 13,895 to one USA dollar. The People’s Bank of China set the yuan’s fixing against the United States dollar stronger by 14 basis points to 6.5616.
