Asia market trends Thursday: Concerns over global economic growth to damp sentiment

Port facilities in Hong KongPort facilities in Hong Kong

Markets globally continue to fret over signs of slowing global economic growth, and Asia shares may open trade on Thursday under a cloud.

“Against a backdrop of various concerns about other economies, weakness in China adds to reasons to expect a marked global slowdown,” Jennifer McKeown, head of the global economic service at Capital Economics, said in a note on Wednesday.

She noted that official data showed China gross domestic product (GDP) growth slowed to 6.4 percent in the fourth quarter, the weakest since the data series began in 1992. She estimated the slowdown in China, which makes up 19 percent of the world economy, would knock 0.2 percentage point off global growth, with a slowdown to a 10-year low.

That would put growth at levels last seen during the Global Financial Crisis.

“While China may not be the trigger of a global recession, its slowdown is taking place in an otherwise fragile environment, with the U.S. set to feel the effects of reduced policy stimulus, the euro-zone already in a broad-based slowdown and many emerging economies vulnerable to debt worries,” McKeown said.

Indexes

Japan’s Nikkei 225 index was down 0.36 percent in early trade.

Singapore’s Straits Times Index was down 0.68 percent at 3171.11 on Wednesday; January futures for the index were at 3172 on Wednesday, while February and March futures were at 3175 and 3172.

Hong Kong’s Hang Seng Index was nearly flat at 27,008.199 on Wednesday, while China’s CSI 300 nudged down 0.07 percent to 3141.053.

Malaysia’s KLCI was down 0.82 percent at 1688.14 on Wednesday, while Indonesia’s IDX Composite was off 0.27 percent at 6451.17.

The Dow Jones Industrial Average added 0.70 percent to 24,575.62, the Nasdaq Composite was up 0.08 percent at 7025.768 and the S&P 500 was up 0.22 percent at 2638.70. Futures for the three indexes were down in early trade.

Oil

Nymex WTI crude oil futures for March were down 0.19 percent at US$52.52 a barrel at 7:47 A.M. SGT, while ICE Brent crude oil futures for March were down 0.59 percent a barrel at US$61.14 a barrel at 6:59 A.M. SGT, according to Bloomberg data.

Get the Shenton Wire morning briefing in your inbox