Asian markets hit by China trade data, US rate talk


HONG KONG: Asian markets mostly fell on Thursday as weak Chinese trade data reinforced worries about the world’s number two economy, while Federal Reserve minutes stoked fresh talk of a US rate hike before the year’s end.

However, troubled Samsung Electronics staged a slight recovery on bargain-buying after losing about 10 percent of its value this week on the Galaxy Note 7 crisis.

China said exports plunged more than predicted last month, disappointing markets after a recent upbeat reading on factory activity. In yuan terms it snapped six straight months of increases. Imports also fell, confounding predictions for a rise.

Analysts said the news will also likely put further pressure on the yuan, which is already at six-year lows against the dollar.

The figures come just a week before the release of third-quarter growth data that are tipped to show the economic powerhouse and key driver to world trade growing at its slowest pace in a quarter of a century.

“Asian shares are falling on a combination of the prospect of the US raising interest rates and a slowdown in global demand hurting China exports,” said Andrew Sullivan, managing director of sales trading at Haitong International Securities Group in Hong Kong.

Despite the disappointment, Shanghai ended up 0.1 percent but Hong Kong lost 1.6 percent while Tokyo sank 0.4 percent by the close.

Sydney fell 0.7 percent, Seoul shed 0.8 percent and Singapore was 0.6 percent lower in late trade.

Bangkok was down 2.2 percent in the afternoon, extending a sharp sell-off this week on worries about the gravely ill King Bhumibol Adulyadej, who is considered a uniting influence on the fragmented nation.

The market has lost more than eight percent this week, with many business leaders — domestic and foreign — privately fretting that the king’s demise could lead to economic instability.

‘Locked and loaded’

Regional dealers were already nervous as the Fed minutes showed last month’s decision to hold rates was a “close call”, suggesting they are likely to move in December at the latest.

The dollar soared to 104.72 yen in New York from 103.63 yen earlier in Asia. However, it gave up those gains in Tokyo Thursday, slipping to 103.84 yen.

“The US dollar is getting stronger as it looks like a December rate hike in the US is locked and loaded just awaiting the trigger,” said Greg McKenna, chief market strategist at AxiTrader.

The pound fell to $1.2170 from $1.2210, wallowing at 31-year lows on concerns over Britain’s exit from the European Union, which many fear will be “hard”, meaning it will not be allowed access to the bloc’s single market.

Samsung rose 1.4 percent, with Duncan Robertson, a portfolio manager at TT International, saying the firm “offers exceptional value; we have added to our position”.

Samsung lost 10 percent between Monday and Wednesday after it said it would stop making the Note 7 and told customers not to use the handset.

The firm last month recalled 2.5 million Note 7s following complaints of battery fires, but the crisis deepened last week when reports emerged that replacements were also faulty.

Robertson said the battery issue “can only be a long-term threat if the company doesn’t take the correct steps to restore its brand. We have confidence that they have taken the correct steps so far”.

The crisis is expected to cost Samsung billions of dollars but ratings agency Fitch warned: “The potential long-term brand damage from the recall and production suspension … is a greater threat to its credit profile than the direct financial impact.”

In early European trade London fell 0.5 percent, Frankfurt shed 0.9 percen and retreated 0.7 percent.


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