China Growth Woes Continue To Drag Down Global Markets

The MSCI Asia Pacific Index rose 1.2 per cent to 133.04 as of 9.47 am in Hong Kong.

Optimism for the sector also gained momentum as merger talks to create what would be the world’s fourth-largest container operator from the groups’ container-shipping units move to advanced stages.

Crude markets are struggling to cope with the oversupply caused by a slowdown in the global economy – particularly in major energy user China – as well as prospects for a flood of Iranian oil as sanctions over its nuclear programme are lifted.

Asian markets also rose amid hopes that borrowing costs would remain lower for longer, and that the Fed’s delay would slow capital flight from emerging markets.

Adding to downward pressure across Asia was a sell-off in energy firms that was fuelled by a plunge in oil prices late Monday and the weak data from China, the world’s top energy user.

Overnight, soft readings on consumer spending, inflation and jobs in the USA bolstered the case for the Federal Reserve to hold off from raising interest rates in coming months and battered the us dollar.

“Investors are waiting on the sidelines to see what’s transpiring in the fundamental picture, but the fundamental picture hasn’t changed all that much in terms of slowing emerging-market growth”.

Manimbo said the greenback fell after the Chinese trade data as well as the news that British prices slid in September and investor sentiment in Germany slumped to its lowest level in a year.

The Indonesian rupiah hit a fresh four-month high, ahead of the Indonesian central bank’s interest-rate decision later Thursday.

The Singaporean dollar gained the most of currencies in the region, last up more than 1% against the USA dollar.

In commodities, oil prices rose in early Asian trading on Monday after USA drillers cut oil rigs for six straight weeks, while traders awaited Chinese trade data to be published following the one-week National Holiday.

The CSI 300 in Shanghai shed 2.65 points, or 0.1%, to 3,345.04.

“The weak inflation data, along with other disappointing releases recently such as yesterday’s trade figure, makes more monetary easing and fiscal stimulus very likely if China is to achieve something close to the 7.0 percent (GDP) growth it targeted at the beginning of the year”, said analyst Craig Erlam at traders Oanda.

Growing speculation that Japanese authorities will introduce additional stimulus to support the flagging economy boosted the Nikkei.

China abruptly devalued the yuan on August 11, roiling global markets for a few weeks, and had to scramble to contain fears that it was set to let the currency depreciate further. The Hang Seng China Enterprise Index, consisting of mainland Chinese H shares listed in Hong Kong, fell 1% to 10,338.50.

China Unicom and China Telecom closed down 2.8% and 0.5% while China Mobile remained up 2.7%. The broader Topix index finished 2.15 percent lower at 1,470.83.

The dollar was about 0.1 per cent lower against the yen at 119.66 yen JPY=, while the euro added about 0.2 per cent to buy $1.1396 EUR= after rising to a 3 1/2-week high of $1.1411 overnight.