Heavy losses for Asian stocks

Strong wave of economic data from China triggers renewed selling pressure

Asian markets slipped today as a strong wave of economic data from China triggered renewed selling pressure. The weak overnight cues from the US markets and selling pressure in commodities also hurt the overall sentiments. China's gross domestic product a much better than expected 9.8% in the fourth quarter from a year earlier. The growth was better than third quarter's 9.6% surge and underscored the fact that the tight money policies initiated by the country's central bank during last year are still not having a desired effect. The country wants to curb this runaway growth and stabilize the macroeconomic environment.



US markets slipped yesterday as financial stocks were hurt amid disappointing earnings from big US banks, notably Goldman Sachs. The US Commerce Department stated that the housing starts fell 4.3% to an annual rate of 529,000 in December. However, the department also noted that the building permits, an indicator of future housing demand, jumped 16.7% to an annual rate of 635,000, indicating that some bounce might be witnessed in the construction activity in near term.

The Japanese stocks closed in red following the to the weak global cues and fell under 10500 levels for the benchmark Nikkei 225 Index. The final data released by the Cabinet Office in Japan revealed that the country's leading index rose to 100.6 in November from 97.7 in the previous month. The coincident index came in at 102.4, up from the initial estimate of 102.1. The reading was 100.7 in the prior month. The lagging index was revised to 87.8 from 87.3 reported earlier. However, the global sell off made traders sideline this sound economic data. The Nikkei closed down 119.79 points, or 1.1%, to 10,437.31 points.

Profit selling took toll on the Sydney stocks too. The Australian stocks had extended gains for the second successive day and closed at a new 9-month high on strong commodity prices in the last session. The momentum turned around today and the benchmark S&P/ASX200 Index declined 50.90 points, or 1.05% and closed at 4,784 points. On the economic front, a statement released by the Melbourne Institute revealed that Australia's consumer inflationary expectations surged to 4.6% in January from 2.8% in the previous month.

In China, stocks got hammered today after a string of data released by the government today reinforced a view that the world's second largest economy is on a firm footing, spurring concern that policymakers might have to unveil fresh measures to check inflation. Property, airlines and resources stocks were among the biggest losers today. Government reports showed the economy grew by 9.8% in the fourth quarter as against consensus estimate of 9.2%. GDP grew by 10.3% in 2010. The Shanghai Composite Index, which tracks the bigger of China's stock exchanges, slid 80 points or nearly 3% to close near the day's low of 2,677.

In Mumbai, the key benchmark indices provisionally closed with small gains in a choppy trade, shrugging off weak global stocks. Interest rate sensitive banking stocks reversed initial losses after the latest government data showed easing of food inflation in early January 2011 and on expectations of strong Q3 results. IT major TCS struck record high in intra-day trade. Other IT stocks, too, edged higher. Oil & gas stocks declined. As per provisional figures, the BSE 30-share Sensex was up 49.70 points or 0.26% to 19,028.02.

In other markets, the Straits Times in Singapore dropped plummeted 1.13%; Seoul Composite in South Korea and Taiex in Taiwan dropped 0.43% each. US dollar was little changed though commodities stayed under pressure after the Chinese data. The crude oil prices dropped after nearing $92 per barrel in the morning. The prices are quoting at $91.35, down 46 cents on the day.