Asia markets fell on Monday after the release of Chinese trade data stoked growth concerns and ongoing European debt jitters damaged sentiment, as early strength for Japanese stocks faded.
South Korea’s Kospi (KR:0100) +0.88% lost 0.7%, China’s Shanghai Composite (CN:000001) -0.19% dropped 0.5%, while Hong Kong’s Hang Seng Index (HK:HIS) +0.23% lost 0.7% and Australia’s S&P/ASX 200 index (AU:XJO) -0.36% shed 0.4%.
Japan’s Nikkei Stock Average (JP:NIK) -0.40% gave up early strength, to edge down 0.2%.
Also on Friday, Greece announced a bond exchange deal with its private creditors to reduce its debt, a move that paves the way for the country to receive a second tranche of bailout funding.
Still, Credit Agricole strategist Mitul Kotecha said investors are likely to remain cautious over developments in Europe as “growing scepticism about the fact that the Greek bailout fails to correct the country’s underlying problems, worries about whether Portugal will follow in Greece’s wake, fiscal slippage in Spain…all point to ongoing tensions in the weeks ahead.”
He also noted sentiment in Asia on Monday was “dampened in part by China’s trade deficit posted in February.”
Following the surprisingly large trade deficit, ports operator Cosco Pacific Ltd. (HK:1199) -1.54% fell 1.9%, shipping firm China COSCO Holdings Co. (HK:1919) -1.75% dropped 2.7%, while merchandise trading house Li & Fung Ltd. (HK:494) -1.46% (LFUGY) +0.22% lost 2.8% in Hong Kong.
Chinese railway-related stocks fell in Hong Kong amid reports that a section of high-speed railroad had collapsed after heavy rain.
Shares in China Railway Group Ltd. (HK:390) -5.35% sank 6%, Zhuzhou CSR Times Electric Co. (HK:3898) -4.36% lost 3.9% and CSR Corp. Ltd. (HK:1766) -4.07% dropped 4.1%.
Losses across the key shipbuilding sector dragged on the broader index in Seoul. Hyundai Heavy Industries Co. dropped 2.8% and Daewoo Shipbuilding & Marine Engineering Co. gave up 2%.
Looking ahead, Conita Hung, head of equity markets at Delta Asian Financial Group in Hong Kong said trading in tight ranges was to be expected ahead of a meeting of European financial ministers which begins later Monday, and the two-day Federal Reserve Open Market Committee meeting on Tuesday.
“All this will affect the market and [investors] are adopting a wait-and-see [attitude]. If the Fed reveals any possibility of another form of QE3, that will lend some support to the market,” Hung said.
Early strength for Japanese stocks faded on Monday. Among major exporters losing ground, Sharp Corp. (JP:6753) -2.49% (SHCAY) -1.09% lost 2.3%, Casio Computer Co.(JP:6952) -1.59% (CSIOY) +3.66% dropped 1.2% and Fujifilm Holdings Corp. (JP:4901) -1.52% (FUJIY) +0.40% shed 1.4%.
The Japanese transport sector was also putting in a weak performance, with West Japan Railway Co. (JP:9021) -2.84% (WJRYF) -2.41% trading down 2.6% and Central Japan Railway Co. (JP:9022) -1.72% (CJPRF) +12.23% shares down 1.5%.
In Sydney, financial firms were among notable decliners. Westpac Banking Corp.(AU:WBC) -0.87% (WEBNF) +0.23% and Australia & New Zealand Banking Group Ltd.(AU:ANZ) -0.87% (ANEWF) -0.65% each shed 0.9%.
Shares in Cockatoo Coal Ltd. (AU:COK) +12.33% jumped 12.3% after South Korea’s SK Networks Co. said it’s aiming to lift its stake in the firm to 40%.