Shanghai stocks end higher on China data

HONG KONG: Shanghai stocks ended at a seven-year high yesterday after another round of weak Chinese data fuelled hopes for fresh stimulus, while the dollar sat around 13-year highs following a forecast-busting US jobs report.

Shanghai added 2.17%, or 108.78 points, to 5,131.88 -- the highest since January 2008 -- while Hong Kong rose 0.21%, or 56.12 points to close at 27,316.28.

Tokyo pared earlier losses to end marginally lower, dipping 3.71 points to 20,457.19, while Seoul closed 0.14% down, giving up 2.91 points to 2,065.19. Sydney was closed for a public holiday. Official data yesterday showed Chinese imports slumped 17.6% in May, a seventh straight fall, and much sharper than the median forecast of 10% by a Bloomberg News poll of economists. Imports had fallen 16.2% in April.

Meanwhile exports dropped for the third successive month, slipping 2.5%.

The figures are the latest to suggest the Asian economic giant is struggling to get back up to speed after growth was recorded at its slowest since 1990 last year.

Elsewhere strong US jobs figures increased the chances of a US interest rate hike before the end of the year, which hit Wall Street, and also overshadowed an upward revision of Japanese economic growth.

The US Labour Department said Friday the world’s biggest economy and key driver of global growth created 280,000 jobs in May.

The figure was far better than forecast and follows a slow start to the year that saw a first-quarter economic contraction partly because of severe winter weather.

The report also showed better wage growth, in an indication of tightening in the jobs market.

However, while the news suggests the recovery is back on track, it also gives the Fed more ammunition to start raising rates again, weighing on US equities.

The Dow shed 0.31% and the S&P 500 dropped 0.14% while the Nasdaq added 0.18%.

The dollar also surged, hitting 125.86 yen at one point, its highest level since June 2002, before easing slightly. In Tokyo yesterday the greenback was at 125.33 yen. The euro was at $1.1156 and 139.82 yen yesterday from $1.1115 and 139.56 yen in US trade.

Oil prices were lower. US benchmark West Texas Intermediate for July delivery fell 47 cents to $58.66 while Brent crude for July eased 42 cents to $62.89 in afternoon trade.