Asian stocks were mixed Monday after China’s trade contracted in April and U.S. job growth came in weaker than expected.
The Shanghai Composite Index tumbled 2.2 percent to 2,848.16 points and Taiwan, New Zealand and Indonesia also fell. Tokyo’s Nikkei 225 gained 0.5 percent to 16,187.21 and Hong Kong’s Hang Seng added 0.5 percent to 20,217.08. Sydney’s S&P ASX-200 gained 0.1 percent to 5,294.90. The benchmark in Singapore also gained.
Chinese trade shrank in a sign of weak global and domestic demand, despite government stimulus efforts. Exports contracted by 1.8 percent in April compared with a year earlier and imports plunged 10.9 percent. Exports so far this year are down 7.7 percent, though that is an improvement over March’s 9.6 percent year-to-date decline.
Disappointing jobs data fueled speculation that the Federal Reserve might keep interest rates low for another year. The economy added 160,000 jobs in April — fewer than the forecast of 200,000. But wage growth accelerated to 0.3 percent over the previous month compared with March’s 0.2 percent rise. Unemployment held steady at 5 percent. “This latest mixed data has further diminished the chances of the rate hike in the Fed’s meeting next month,” said Alex Wijaya of CMC Markets in a report.
Stocks closed modestly higher Friday but ended the week down after three days of losses. The Dow Jones industrial average rose 79.92 points, or 0.5 percent, to 17,740.63. Standard & Poor’s 500 index rose 6.51 points, or 0.3 percent, to 2,057.14 and the Nasdaq composite rose 19.06 points, or 0.4 percent, to 4,736.16.
The government said China’s foreign currency reserves, the world’s biggest, rose $6.4 billion in April to just over $3.2 trillion, the second straight monthly increase. That might help to ease investor fears of a capital outflow that might limit the central bank’s options for countering the slowdown. “We believe the authorities can live with capital outflows as long as foreign reserves stay above $3 trillion, which implies monthly declines of around $20 billion,” ING said in a report.
Investors were watching to see if Philippines voters side with the front-runner in elections Monday, a foul-mouthed mayor who has pledged to wipe out corruption. Rodrigo Duterte’s blunt comments resonate with some voters but have sparked alarm about electing someone with no national political experience and a tendency to make inflammatory remarks. If Duterte wins, Philippine markets “may initially sell off on uncertainty around economic and foreign policy,” Mizuho Bank said in a report.
Benchmark U.S. crude gained 81 cents to $45.47 per barrel in electronic trading on the New York Mercantile Exchange. The contract added 44 cents on Friday to close at $44.66. Brent crude, used to price international oils, advanced 65 cents to $46.02 in London. It rose 36 cents on Friday to close at $46.04.
The dollar advanced to 107.39 yen from Friday’s 107.11 yen. The euro was nearly unchanged at $1.1410.