China’s August Trade Data and its Influence on Stocks
Stocks in Asia-Pacific were mostly higher on Tuesday, as China’s August trade data surpassed expectations. The country’s exports unexpectedly grew at a faster pace thanks to solid global demand. The world’s second-largest economy staged an impressive recovery from a coronavirus-battered slump. Nevertheless, economic momentum declined recently as a result of delta variant-driven Covid-19 outbreaks, high raw material prices, etc.
Shipments from China in August rose at a faster-than-expected rate of 25.6% from a year earlier, from a 19.3% gain in July. Export growth of machineries, as well as hi-tech products, remind high in August.
But the situation is far from being ideal, behind the robust headline figures, companies are struggling on the ground. Companies had to deal with increasing pressure in August as factory activity expanded at a slower pace and the services sector fell into contraction. Moreover, a global semiconductor shortage added to the strains on exporters.
Economic superpower largely contained the latest coronavirus outbreaks of the more infectious delta variant. Authorities tested millions of people and implemented travel restrictions to reach that goal.
In August, imports rose 33.1% year-on-year, buoyed by still high prices. One month earlier, imports rose 28.1%.
The country posted a trade surplus of $58.34 billion in August. Its trade surplus with the United States jumped to $37.68 billion from $35.4 billion in July.
Many analysts expect the country’s central bank to decrease the amount of cash banks must hold as reserves later this year to lift growth.
Stocks on Tuesday
Mainland Chinese stocks rose on Tuesday. The Shanghai composite gained 1.51% to end its trading day at 3,676.59. The Shenzhen component rose 1.074% to 14,702.90.
In Hong Kong, the Hang Seng index advanced 0.73% to close at 26,353.63.
Hong Kong-listed shares of retail firms rose after Bloomberg reported that Hong Kong will start allowing quarantine-free entry for mainland visitors from September 15. Shares of Chow Sang Sang jumped 5.3% while Giordano International added 6.49% and Sa Sa International rose 10.53%.
In Japan, the Nikkei 225 gained 0.86% to finish its trading day at 29,916.14. The Topix index rose 1.09% to 2,063.38. Shares in the country continued to rise after two straight trading days of solid gains.
South Korea’s Kospi dropped 0.5% to close at 3,187.42. In Australia, the S&P/ASX 200 closed little changed at 7,530.30.