Asian markets mixed on US tech rally, weak China data

HONG KONG, China  -Asian markets were mixed Tuesday as a US tech rally buoyed sentiment while a batch of disappointing data from China stoked concerns over the state of the world’s second-largest economy.

Gains by large tech companies including Amazon, Google parent Alphabet and Meta Platforms lifted the Nasdaq by more than one percent at the close Monday.

The sentiment initially carried through to Asia with Tokyo climbing 0.6 percent, boosted by a surge in tech firms and data showing the Japanese economy grew 1.5 percent in the quarter to June thanks to robust exports on the back of a weaker yen.

Sydney, Taipei and Kuala Lumpur were also in the green but other markets gave up early gains, with Singapore, Bangkok and Wellington lower while Jakarta was flat.

Seoul and Mumbai were closed for holidays.

Hong Kong closed down 1.0 percent and Shanghai was off 0.1 percent as a fresh batch of weak figures from Beijing failed to reassure investor concerns about the stuttering Chinese economy.

European markets fell in early trade, with London down 1.1 percent as Britain reported an increase in unemployment while Frankfurt was off 0.7 percent and Paris was 0.8 percent lower.

Concerns about China

Chinese data released Tuesday showed slowing growth in July retail sales while industrial production fell short of analyst expectations.

Beijing also said it would stop reporting its youth unemployment rate, which hit a record 21.3 percent in June, prompting concerns over transparency.

“China reported July data that broadly missed expectations. The National Bureau of Statistics report also omitted the unemployment figure for young people, which has soared to record highs in recent months. Again the lack of transparency continues to irk investors,” said Stephen Innes of SPI Asset Management.

“I think the market was braced for China data to dive below the low watermark. Indeed, heavy rainfalls in northern China, disappointing exports and credit data, and the continued slide in property sales all pointed to weakness in July activity data. So, I don’t think the so-called ‘data dump’ missing by a wide margin was that big of a shock.”

Shortly before the figures were released, China’s central bank unexpectedly cut its one-year loan rate (MLF) in a move to boost the economy amid renewed concerns over the heavily indebted property sector and the woes of massive developer Country Garden, which has warned of billions in losses.

The latest data is likely to increase pressure on Beijing to step in to support an economy that has largely failed to bounce back post-Covid.

“The slightly earlier timing and a larger than expected 15 basis point rate cut of MLF show that Beijing feels the urgency to take more policy easing actions to stabilize expectations and growth,” Xiaojia Zhi, chief China economist at Credit Agricole, told Bloomberg.

On foreign exchange markets, the ruble was trading around 97 to the dollar after Russia hiked its key interest rate to 12 percent following an emergency central bank meeting to stem a slide in the currency.

On Monday, the ruble crashed past 100 to the dollar, its lowest level since March 2022 — following Russia’s invasion of Ukraine and the imposition of Western sanctions.

Elsewhere, the dollar was holding steady above 145 yen, its strongest level against the Japanese currency since November.



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