Asian stocks sink on United States turbulence, weak China growth

In the currency market, the USA dollar is trading in the mid 117 yen-range on Wednesday, down from Tuesday’s close in the upper 117-yen range in Tokyo.

Crude oil prices further collapsed Tuesday, plunging to 12-year lows amid indications there is no longer space at storage facilities to put excess supplies.

Concerns about Chinese authorities’ ability to rebalance the slowing economy have rattled investors this year, after a plunge in stock markets and the yuan currency raised concerns growth may be slowing more rapidly than previously thought.

Data from China showed that the country’s economic growth eased to 6.8 per cent in the fourth quarter from a year earlier, in line with expectations but still the slowest since the financial crisis.

Asian stocks were subdued early on Tuesday following a retreat in European shares overnight, while crude oil prices remained bearish following the lifting of sanctions against major producer Iran. “The stabilisation we saw yesterday now appears to have only been a pause”.

“This is a different kind of dollar strength altogether… this is quite clearly being driven by declining risk appetite, higher market volatility and lower commodity prices”, said Aroop Chatterjee, a director of research at Barclays in London.

The Hong Kong stock market’s benchmark index posted its single biggest daily fall since early August, while Japan’s Nikkei closed down 3.7 per cent. It is now 20 per cent below last year’s peak, meeting the technical definition of a bear market.

Dealers were left to cite speculation of further Chinese policy stimulus as a possible excuse.

The old “bad news is good news” mind-set returned overnight in China, with slowing growth in gross domestic product (GDP) raising hopes that the authorities will provide more stimulus.

Before market open, the People’s Bank of China (PBOC) fixed its dollar-yuan mid-point at 6.5596, keeping it stable following the previous session’s fix of 6.5590.

That rally was puzzling to many given the economic news from China was hardly bright, and the International Monetary Fund cut its global growth forecasts for the third time in less than a year. S&P 500 futures gained 28 points, or 1.48% to 1902, while Nasdaq 100 futures added 63 points, or 1.53% to 4203. On the Nasdaq, 1,594 issues rose and 825 fell.

Top-rated German bond yields rose as investors favored riskier assets, such as stocks.

Credit Agricole rose 5.2 percent after the company confirmed a report that it was looking at the possibility of selling stakes in over three dozen regional banks, saying it would bolster its capital and help finance dividends. Oil prices again dipped below $30 a barrel Tuesday morning.

Materials and oil stocks plummeted after U.S. benchmark crude dropped more than 3% to below $29 a barrel.

Full-year growth, meanwhile, fell to 6.9%, which was it lowest level since 1990 and a touch below expectations.

Rio Tinto edged 3.9pc higher on the move in copper prices, but also on plans to increase iron ore production and shipments this year.