Asia stocks edge higher; China exports decline in November

Marco Green
December 9, 2019

The Shanghai Composite index rose almost 0.1% to 2,914.48. The S&P 500 .SPX lost 1.96 points, or 0.06%, to 3,143.95 and the Nasdaq Composite .IXIC dropped 5.22 points, or 0.06%, to 8,651.31.

Chinese exports unexpectedly fell 1.1% in November Vs a year earlier, with exports to the U.S. down 23%. Imports were up 0.3% year-on-year.

The weak start to the week came despite data showing China's crude imports jumped to a record, revealing just how deep jitters are embedded in the market over the US-China trade row that has stymied global growth and oil demand. Roughly $42 billion in additional tariffs were paid between February 2018 and October 2019, according to the data.

China's exports shrank for the fourth consecutive month in November, sending shivers through a market already concerned about damage being done to global demand by the trade war, but growth in imports may be a sign that Beijing's stimulus steps are helping to stoke demand. Data showed at the weekend that exports fell more than expected as the tariffs spat with the United States grinds on, though imports beat forecasts.

Asian stocks edged up on Monday, catching some of Wall Street's momentum after surprisingly strong United States (US) jobs data although regional gains were capped by concerns about China's economy due to the prolonged US-China trade war.

Imports unexpectedly rose 0.3% from a year earlier, compared with a 1.8% decline forecast by economists and a 6.4% decline in October.

Among the data, China's November month trade numbers played their roles. Both parties aim to reach a phase one trade deal that has remained elusive ahead of a closely-watched date of December 15, when additional tariffs on Chinese exports to the U.

US shares were set to drift slightly lower with Dow and S&P 500 futures both falling less than 0.1%. "Right now, the clouds of recession still remain well offshore despite troubled economies elsewhere in the world and a trade war".

"Yet chip-related shares are doing well, suggesting investors are still positive on the outlook of Sino-U.S. trade talks overall". Until the phase one deal is secured, negotiators are unable to move onto the more ambitious, but also more contentious, phase two deal.

"While Chinese officials will no doubt highlight the surge in y/y growth in imports from the USA during trade talks, in seasonally adjusted terms purchases from the U.S. fell the most last month since December 2018", Evans-Pritchard said.

"We don't expect tariffs to go into effect as the talks are ongoing but the trade talks are the main driver this week", he said, adding he did not expect any "fireworks" from the central bank meetings.

Asian markets were mixed Monday as investors struggled to track a rally on Wall Street that was fuelled by a forecast-busting USA jobs report, while there was little inspiration from tepid Chinese trade data.

The dollar index stood nearly flat at 97.704 in early Asian trade on Monday, after rising 0.3% on Friday.

Other reports by Click Lancashire

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