Asian Stocks Rally Derailed by Downbeat China Trade Data


An Asian stocks rally was derailed on Tuesday by poor Chinese data pointing to a slowdown in the recovery of the world’s No2 economy. 

The pullback came after customs data emerged showing China’s exports in the January-February period fell from a year earlier. Imports also decreased at a faster rate, reflecting a slowdown in the global economy and weak domestic demand.

And sentiment took another blow from higher US yields amid fears the Federal Reserve will keep raising interest rates to combat sticky inflation.


Also on AF: 13 Chinese Cities Issue Smog Alerts as Factory Output Climbs


But Japan’s Nikkei bucked the trend, climbing to a three-month peak while the broader Topix index rose to its highest since late 2021.

Still, uncertainty ahead of Federal Reserve Chair Jerome Powell’s Congressional testimony later in the day, a crucial US jobs report on Friday, and Bank of Japan Governor Haruhiko Kuroda’s final interest rate decision before retirement this week capped those gains.

The Nikkei ended 0.25% higher at 28,309.16, after touching a high of 28,398.27 earlier in the session, a level last seen on December 1. The broader Topix added 0.42% to close at 2,044.98, after hitting 2,046.11, its highest level since November 2021.

China and Hong Kong stocks fell, weighed down by China trade data that pointed to sluggish domestic demand and undercut expectations for an economic rebound.

China’s blue-chip CSI 300 closed down 1.5%, while the Shanghai Composite Index lost 1.11%, or 36.93 points, to end at 3,285.10 

Hong Kong’s Hang Seng Index slid 0.33%, or 68.71 points, to 20,534.48, and the China Enterprises Index dropped 0.4%.

China and Hong Kong energy indexes soared, though, tracking rising global oil prices after industry executives flagged concerns over oil supplies while demand from China increases as the economy recovers.

The CSI Energy index was up 1.4%, with CNOOC rising 5.9%, China Petroleum & Chemical 3.1% and PetroChina 2.4%. Similarly in Hong Kong market, energy shares gained 3.2%. 

Elsewhere across the region, Sydney, Singapore, Seoul, Bangkok, Taipei, Wellington and Manila all rose.

But MSCI’s broadest index of Asia-Pacific shares outside Japan lost 0.4%, unwinding some of the 2.1% gain in the previous session – the index’s best day in two months.


Crypto Outfit Silvergate Suffers

S&P 500 futures fell 0.5% and Nasdaq futures were off 0.6%, pressured by a 5.5% drop in Tesla shares in after-hour trading. The company will cut vehicle assembly costs by half in future generations of cars, but Chief Executive Elon Musk did not unveil a much-awaited small, affordable electric vehicle.

Overnight, both bonds and shares took a battering, as inflation indicators from Germany and the United States reinforced expectations interest rates would go higher and stay there for longer. Germany’s two-year government bond yield rose to its highest since October 2008.

In the United States, manufacturing activity contracted for a fourth straight month in February, but a gauge of prices for raw materials increased last month, stoking concerns that inflation would remain stubborn.

Benchmark 10-year Treasury yields hit a fresh four-month high of 4.028%, while two-year yields also advanced to 4.9310%, a fresh 15-year high.

Investors still mostly foresee the Fed raising rates by 25 basis points at its next meeting later this month, but expectations of a larger 50 basis points hike have increased. 

In currency markets, the US dollar index, measuring the greenback’s value against a basket of major peers, gained 0.2% to 104.62.

In the crypto world, shares in Silvergate Capital plunged by as much as 28% after the cryptocurrency-focused bank said it was delaying its annual report and was evaluating its ability to operate as a going concern.

Oil prices were largely steady, having risen by 1% the previous day due to optimism over China’s recovery. US crude held at $77.72 a barrel. Brent crude was largely unchanged at $84.38 per barrel.


Key figures

Tokyo – Nikkei 225 > UP 0.25% at 28,309.16 (close)

Hong Kong – Hang Seng Index < DOWN 0.33% at 20,534.48 (close)

Shanghai – Composite < DOWN 1.11% at 3,285.10 (close)

London – FTSE 100 > UP 0.16% at 7,942.70 (0936 GMT)

New York – Dow > UP 0.12% at 33,431.44 (Monday close)


  • Reuters with additional editing by Sean O’Meara


Read more:

China Exports, Imports Slump in First 2 Months as Demand Sinks

Xi’s Right Hand Man, Li Qiang, to be China’s Next Premier



Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.

Recent Posts

China’s Shenzhou-16 Rocket Takes Astronauts up to Space Station

The astronauts will replace the three-member crew of the Shenzhou-15, who arrived at the space…

3 hours ago

Singapore Ousts Hong Kong as APAC’s Costliest City for a Home

A heavy influx of immigrants and a trend among young professionals to move out of…

4 hours ago

Elon Musk Reaches China, Meets Foreign Minister Qin Gang

The trip is Musk's first to China since he made headlines in early 2020 by…

5 hours ago

Japan Plans to Beam Solar Power From Space by 2025 – engadget

The country made a breakthrough in space-based solar energy back in 2015 and now says…

6 hours ago

India May Cut Import Tax on Solar Panels Amid Domestic Shortage

Government sources said the import tax may be halved, and GST cut, because local producers…

7 hours ago

China Strains, AI Top of The Agenda at US, EU Summit Talks

A 24-page draft joint statement focuses on AI algorithm standards, export controls and China’s non-market practices and disinformation

7 hours ago