Asian stocks pulled lower Monday, weighed by an unexpected drop in exports from China and the threat of default by the world’s largest economy later this week.
Most regional benchmarks struggled in the wake of data out Saturday showing exports from China fell 0.3% in September from the year-earlier period, marking the weakest performance in three months. Economists had been looking for an increase of 5.5%,.
Australia’s S&P/ASX 200 fell 0.6%. China is Australia’s largest trading partner which makes Australian assets particularly sensitive to Chinese data. Taiwan’s Taiex also fell 0.6%, and Singapore’s Straits Times Index shed 0.3%.
Meanwhile, reports cited no sign of progress toward reaching a deal that would end the partial U.S. government shutdown and steer the nation away from a potential default on its debt obligations.
Senate Republicans and Democrats met Sunday in a bid to broker a budget deal as the Republican-led House and President Barack Obama remained deadlocked. The Republicans want compromises on Obama’s health-care law, while Democrats have called for one-year deals for “clean” budget and debt-ceiling resolutions that have no cutbacks in funding the health-care program.
The administration puts the deadline for Congress to authorize the Treasury to pay its bills at Oct. 17.
But stocks in mainland China bucked the losing trend, with the Shanghai Composite higher by 0.2% at 2,233.85. The market held to higher ground after Chinese government data showed consumer prices in September rose faster than anticipated (+3.1% versus +2.8% expected and +2.6% on August), while wholesale prices extended their long string of declines.
Equity trading in Japan and Hong Kong was closed for holidays.
In Australia decliners on Monday included financial and resource-related issues. Among miners, shares of gold producer Newcrest Mining Ltd. dropped 3.7% after gold futures late last week fell below $1,300 an ounce.
In Sydney, shares of Oz Minerals Ltd. fell 8.6% after the company lowered its full-year copper-production outlook earlier Monday.
In Shanghai, investors considered a report that China plans to allow insurers to invest a larger share of their portfolios in stocks and real estate. The Friday report from the China Securities Journal said investment in equities may be allowed to rise to 30% from 25% of total assets, and to 30% from 20% for real estate and infrastructure.
Shares of Ping An Insurance Group Co. turned higher, rising 0.3%, and China Construction Bank Corp. picked up 0.1%. But Agricultural Bank of China Ltd. shed 0.2%.
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