Asian Shares Lower on China Data
08/09/2012| 09:56pm US/Eastern
Asian markets were lower on Friday as Chinese exports and imports slowed sharply, while sourcing giant Li & Fung slumped 20% on poor half-year results.
Chinese trade data weakened an already lackluster session -- the trade surplus narrowed sharply to $25.1 billion in July compared to a forecast $35.2 billion, while exports increased just 1% on-year against an expected 8%.
Hong Kong's Hang Seng Index extended losses after the announcement, down to 0.8% -- eating into a 7.4% rally made over the last 11 sessions. The Shanghai Composite gave up a modest rise from earlier in the day, turning negative, down 0.2%.
The Australian dollar dipped after the data, but soon bounced back to $1.0520, while the S&P ASX 200 slipped 0.5%. Commodity stocks were lower: Rio Tinto dropped 0.3% and Fortescue Metals Group lost 0.8%. High-yields stocks -- such as banks and telecoms -- continued to pull back from their recent gains.
The latest numbers follow Thursday's easing inflation and industrial production data, which were interpreted by many as leaving room for Beijing to implement more measures to stimulate the economy.
The Hang Seng was also hurt by Li & Fung, which slumped 20% after announcing that its core operating profit declined 22% on-year in the first half, in part due to a slower-than-expected turnaround in its U.S. distribution business. Tencent was the index's other notable loser, down 3.8%.
The yen stabilized against the dollar as the greenback strengthened overnight, after U.S. trade numbers came out better than expected and the number of jobless claims fell. The dollar was at Y78.61, compared to Y78.56 late on Thursday.
A softer yen was not enough to help Japan's Nikkei, typically an aid for local exporters, which was 0.9% down in early trading, as investors stepped back after a 5% gain on the benchmark over the last four trading days. Leading the retreat were telecoms shares -- Nippon Telegraph and Telephone Corp lost 0.4% and Softbank declined by 1.3%.
South Korea's Kospi, which also gained 5% in the first four sessions of the week, was the only market to resist the declines -- up just 0.1%.
Chinese oil company Sinopec gained 0.3% in Hong Kong after China raised fuel prices for the first time since March.
Olympus Corp. lost 3.1% in Tokyo after the firm announced that its first quarter net loss widened significantly on year. The company also said that it is looking for a partner to invest around Y50 billion to bolster its finances.
Write to Daniel Inman at Daniel.Inman@wsj.com
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