Forexpros – Asian stock markets retreated on Tuesday, following a report showing China’s trade balance swung to an unexpected surplus last month, while shares in Japan erased gains after the Bank of Japan failed to provide fresh stimulus measures.
During late Asian trade, Hong Kong’s Hang Seng Index slumped 0.9%, Australia’s ASX/200 Index fell 0.65%, while Japan’s Nikkei 225 Index dipped 0.15%.
China’s trade balance swung to a surprise surplus of USD5.3 billion in March from a deficit of USD31.5 in the previous month, as import growth came in below expectations, official data showed earlier.
Economists had expected the trade deficit to narrow to USD1.3 billion in March.
The report said that exports rose by 8.9% in March from a year earlier, above expectations for a 7.0% increase but slowing significantly from export growth of 18.4% in the same month a year earlier.
Imports rose 5.3% from a year earlier, below expectations for a 9.0% increase and decelerating sharply from imports of 39.6% in March of last year.
Slowing imports suggest some exports slowdown in coming months as well as a domestic slowdown.
Market players have been searching for clues in regards to Chinese growth prospects amid fears the country is headed towards a ‘hard landing’.
A deeper slowdown in China, the world’s second biggest economy, would impair a global expansion that is already faltering because of the implementation of harsh austerity measures in Europe.
The Asian nation is set to release government data on the size of its economy on Friday. On Monday, official data showed that consumer price inflation in China accelerated by 3.6% in March, up from 3.2% in February and above expectations for a 3.3% increase.
The higher-than-expected reading dampened expectations Beijing will introduce fresh monetary easing measures in the near-term to prop up the world’s second largest economy.
Shares in Hong Kong and Australia were already under pressure as the market reopened following a four-day holiday, during which the U.S. reported slower jobs growth and China’s inflation accelerated.
Weakness in financial sector stocks weighed on both benchmarks, while Hong Kong property developers also contributed to losses on the Hang Seng.
Elsewhere, in Japan, the Nikkei turned lower after the Bank of Japan unanimously decided to keep its benchmark interest rate unchanged and made no changes to its asset-purchase program.
The yen, which strengthened slightly on the announcement, gave a lift to exporters, with automakers Toyota and Honda up 1.5% and 0.6% respectively.
On the downside, Sharp tumbled 4.3% after a Nikkei report said the electronics maker was expected to post a bigger net loss for the 2011 fiscal year than previously projected, hurt by poor sales of televisions and solar cells.
The Nikkei rallied more than 19% in the first three months of the year, buoyed in large part by an unexpected easing announcement by the BoJ in February, but the index has fallen nearly 6% since the start of April.
Looking ahead, European stock markets were set to open sharply lower, as markets return from a four-day holiday.
The EURO STOXX 50 futures pointed to a loss of 1.25%, France’s CAC 40 futures dropped 1.45%, London’s FTSE 100 futures retreated 0.85%, while Germany’s DAX futures pointed to a drop of 1.15% at the open.
Later in the day, the euro zone was to publish data on investor confidence while France was to release official data on industrial production.
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