• Shanghai, HK stocks down despite China data

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    HONG KONG: China said imports fell in May at their slowest pace for 19 months, fuelling hopes of a pick-up in demand, but traders in Hong Kong and Shanghai gave a muted reaction on Wednesday.

    Beijing said imports declined just 0.4 percent in dollar terms in May, the slowest rate since October 2014, and beating estimates of 6.8 percent in a Bloomberg News survey.

    It also said exports slipped a slightly-more-than-forecast 4.1 percent, indicating some stability is setting in.

    The figures raised hopes the world’s number two economy, a key driver of global growth, could be near the end of a slowdown that has had dire knock-on effects internationally.

    “Recovering commodity prices and relatively resilient domestic demand are driving a recovery in import growth,” Julian Evans-Pritchard, an analyst with research firm Capital Economics, said in a note.

    However, after a recent rally the figures were overshadowed by profit-taking, which saw Shanghai end 0.3 percent lower while Hong Kong shed 0.1 percent.

    Among other markets Sydney was marginally lower but Seoul gained 0.8 percent.

    Investors were given a positive lead from Wall Street. The Dow and S&P 500 shifted higher, led by energy firms as crude pushed above $50 to sit at 11-month highs thanks to a weaker dollar and output disruptions in key producer Nigeria.

    Japan’s Nikkei swung back and forth through the day before ending up 0.9 percent following news that the country’s economy grew a little more than first thought in January-March.

    However, Koya Miyamae, an economist at SMBC Nikko Securities in Tokyo, said before the report was released: “Even with the . . . revision, there’s no change to the picture that Japan’s economy has plateaued and has no clear driver to boost momentum in the months ahead.”

    Dollar retreats

    While the news does not flag a rebound in the world’s number three economy, it could sway the Bank of Japan against unveiling any fresh stimulus for the time being. That in turn gave upward momentum to the yen.

    In afternoon trade the dollar bought 106.97 yen, against 107.39 yen in New York late Tuesday. The greenback was also weighed down by the prospect of US interest rates staying low until later in the year.

    The euro was at 121.60 yen from 121.97 yen.

    The pound dipped slightly against the dollar after recent volatility, with few traders able to gauge whether a June 23 referendum will result in Britain remaining in or leaving the European Union.

    Recent polls have shown momentum with the exit camp, fanning worries that such a decision will spur significant market turmoil and slow or stall the British economy.

    The World Bank issued a downbeat outlook on the global economy, slashing its forecast for 2016 growth to 2.4 percent this year, the same lethargic pace of last year and much slower than the 2.9 percent tipped in January.

    The Bank cited a slower-than-expected rebound in advanced economies, which was holding back developed countries, with world trade and investment both depressed.

    It also said there were doubts that the aggressive monetary easing in developed countries, with negative interest rates in several, was firing up economic activity as intended.

    In early European trade London was down 0.1 percent, Frankfurt lost 0.4 percent and Paris slid 0.3 percent.

    AFP

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