Asia report: Markets mixed as China trade data beats forecasts

(Sharecast News) - Stock markets across the Asia-Pacific region closed with a mixed performance on Thursday, with Japan's benchmark pulling back from recent record highs. Investors were also digesting trade data from China that surpassed expectations.

"In the Asian region, major stock market indices showed a mixed performance after positive closures in the US and Europe," said TickMill market analyst Patrick Munnelly.

"Japanese stocks declined while the yen rose, amid speculation about potential near-term increases in policy interest rates.

"Despite stronger-than-expected trade data, Chinese stocks gave up earlier gains."

Most markets in the red, Nikkei falls back from highs

In Japan, the Nikkei 225 retreated by 1.23% to 39,598.71, while the Topix index also dipped by 0.44% to 2,718.54.

Leading the losses on Tokyo's main board was Mazda Motor, dropping 6.28%, followed by Dainippon Screen Manufacturing, off 6.11%, and Nissan Motor, which lost 4.78%.

In China, the Shanghai Composite edged down by 0.41% to 3,027.40, and the Shenzhen Component fell by 1.37% to 9,267.12.

China Television Media and Inly Media were among the big fallers in Shanghai, dropping 7.54% and 7.01%, respectively.

Hong Kong's Hang Seng Index also saw a decline of 1.27% to 16,229.78, driven by significant losses in WuXi Biologics, down 21.47%; WuXi AppTec, off 20.56%; and Zhongsheng Group, which was 6.35% weaker.

The plunge in shares of Chinese biotech firms WuXi Biologics and WuXi AppTec followed the US Senate homeland security committee's approval of a bill that could restrict business with Chinese biotech companies due to national security concerns.

Meanwhile, South Korea's Kospi index managed a modest gain of 0.23% to 2,647.62, led by notable increases in Samsung SDI and Kumyang of 13.03% and 4.55%, respectively.

In Australia, the S&P/ASX 200 index rose by 0.39% to 7,763.70, buoyed by gains of 6.42% for Alumina and 5.88% for Perseus Mining.

New Zealand's S&P/NZX 50 index saw a marginal increase of 0.07% to 11,803.93, with the A2 Milk Company and Restaurant Brands New Zealand contributing to the positive sentiment with respective gains of 2.43% and 2.27%.

In currency markets, the dollar was last 0.94% weaker on the yen, trading at JPY 147.98.

The greenback also weakened against its down under counterparts, last falling 0.52% against the Aussie to AUD 1.5155, while it retreated 0.42% from the Kiwi to change hands at NZD 1.6246.

On the oil front, both Brent crude and West Texas Intermediate futures saw declines, with the former last down 0.76% on ICE at $82.33 per barrel, and the latter off 0.72% on NYMEX to $78.56.

China trade figures top forecasts, Japan wage negotiations in focus

In economic news, China's export figures for the first two months of 2024 surged beyond expectations, with dollar-denominated exports seeing a 7.1% year-on-year increase, significantly surpassing the 1.9% rise anticipated in a Reuters poll.

Dollar-denominated imports also saw growth, totaling $402.85bn, a 3.5% rise from the prior year.

Meanwhile, China's yuan-denominated exports and imports rose by 10.3% and 6.7%, respectively, during the January and February period, as per official data.

"We think Chinese exports is on the road to a slow recovery, but the journey will be bumpy," said Pantheon Macroeconomics senior China economist Kelvin Lam.

"External demand continued to improve in the first two months of 2024, with exports to non-G7 economies growing faster than those to traditional developed markets.

"In terms of commodities exported, similar pattern of growth is observed in earlier regional trade data, such as stronger US shipments versus weaker European demand."

Lam also saw the reversal of the bifurcation between stronger cars and weaker semiconductor export value growth in recent months, thanks to the upturn in the ICT cycle.

"Commerce minister Wang Wentao recently said in the NPC meetings portraying 'a very grim outlook' for exports in 2024, as foreign demand for Chinese goods is expected to stay weak.

"He also said the export industries are currently moving up the value chain, suggesting that we will see a terminal decline in exports of low-value added items, such as plastic shoes and OEM garments in the medium term."

In Japan, UA Zensen, the country's largest industrial union group, revealed that companies had agreed to boost full-time workers' pay by 6.7%.

The agreement came as 25 member unions secured a "full response" from management in the ongoing annual spring wages discussions, set to end by 13 March.

Japan's 'Shunto' collective negotiations are closely monitored by the Bank of Japan and considered pivotal for encouraging consumer spending.

The central bank, anticipating a shift away from its negative rates regime in April, views wage hikes as a potential catalyst for economic stimulation.

In Australia, fresh official data showed a 2.6% decline in new owner-occupier home loans for January compared to the prior month.

Additionally, new loan commitments for housing dipped by 3.9%, while personal fixed-term lending witnessed a 6% increase.

Reporting by Josh White for Sharecast.com.