Tuesday, January 21, 2014

Asia Mostly Down on China Growth Worries

Asia ended mostly down on worries China growth could be running out of fuel. The China economy grew 7.7% on-year in 4Q-13, down from 7.8% seen a quarter ago. Still growth numbers beat consensus forecast for a 7.6% figure, and are at levels the country’s leaders are comfortable with.

But other numbers showed slower growth momentum. Industrial production eased to 9.7% on-year in December while fixed asset investments rose just 19.6% in FY13, compared to 20.6% a year earlier. Retail sales growth slowed a tad at 13.6% on-year from November’s 13.7%.

China’s SHCOMP fell 0.7%, while Hong Kong’s Hang Seng ticked 0.9% down.

Taiwan’s TWSE rose 0.2% as investors cheered better-than-expected export orders data. Orders expanded 7.4% on-year, faster than the 2.0% increase forecasted by a Bloomberg survey of economists.

In Southeast Asia, Singapore’s STI fell 0.6%, while Indonesia’s JCI ended 0.4% up. Malaysia opened the week on a weak note, closing 0.3% lower.

Thailand’s SET dipped 0.4% after the National Security Council said they are “very seriously” considering a state of emergency after a weekend of violence in Bangkok. Anti-government protesters have been trying for more than two months to overthrow the government.

Focus this week will be on the Bank of Thailand’s policy meeting on Thursday where consensus expects a 25 basis points rate cut. The central bank has been rather sensitive to the domestic political scene since 2006. However, DBS believes the BoT may resist another rate cut as confidence is likely to continue slumping as the political deadlock drags on.

India’s Sensex tacked on 0.7%, supported by gains in software stocks after Wipro, India’s third-largest software services vendor, said profit rose 33% on-year in the October-December quarter.