Most SEA stocks drop as week China factory data dents sentiment

MOST Southeast Asian markets dropped yesterday, with Singapore shares falling 1.2 per cent, after China reported weak factory data, underlining rising risks to the world’s second-largest economy as Beijing works to defuse a trade spat with Washington.

Data released in early Asian tradinghoursshowedthatNovember industrial output in China – the largest trade partner for most of Southeast Asian countries – grew at their weakest pace since 2003 and industrial output rose the least in nearly three years as domestic demand softened further.

Industrial output rose 5.4 per cent in November, missing analysts’ estimates and matching the rate of growth seen in January-February 2016. Factory output had been expected to grow 5.9 per cent, unchanged from October’s pace.

“Indeed, investors are right to be worried about global growth as China economy continues to sputter,” Stephen Innes, OANDA head of Trading – APAC, said in a note.

However, Liu Jinshu, director of research at NRA Capital said, he wouldn’t be surprised to see a late afternoon recovery as investors ponder the odds of further stimulus from the Chinese government.

Investors kept a cautious stance ahead of the US Federal Reserve’s last meeting for 2018, scheduled for next week, where it is broadly expected to raise borrowing costs. — Reuters