Asia stocks dealt body blow as China exports tank

REUTERS  - Asian stocks shuddered lower on Friday after shockingly weak export data from China heightened market fears about a global economic slowdown, a day after European policymakers slashed growth forecasts for the bloc. Beijing reported exports in February tumbled 20.7 percent from a year earlier, far beneath forecasts of a 4.8 percent drop and more than erasing January’s surprise jump. Analysts cautioned the timing of the Lunar New Year made it difficult to draw a true signal from the data noise, but the scale of the miss was alarming. Adding insult to injury, China’s leading brokerage Citic Securities issued a rare “sell” rating on the Shanghai-listed shares of People’s Insurance Group of China (PICC) sending them down almost 10 percent. Shanghai blue chips quickly extended early losses to be down 2.9 percent, the sharpest daily fall since October, while the dollar climbed on the yuan. Japan’s Nikkei dropped 2.0 percent and Australia 0.9 percent. MSCI’s broadest index of Asia-Pacific shares outside Japan skidded 1.2 percent to a two-week trough. E-Mini futures for the S&P 500 eased 0.2 percent and spreadbetters pointed to opening falls for European bourses. ECB President Mario Draghi said the economy was in “a period of continued weakness and pervasive uncertainty” as he pushed out a planned rate hike and instead offered banks a new round of cheap loans. The reversal came in the same week that Canada’s central bank took a sudden dovish turn and dismal data from Australia to the UK instilled a sense of foreboding in markets. “When central banks surprise like this some investors wonder whether that infers things are much worse than they thought,” said Gavin Friend, a senior market strategist at NAB. “Our initial take is these developments are pressing down on market confidence, seen in lower bond yields and equities.” Yields on German and French 10-year bonds dived to their lowest since 2016, while banking stocks took a beating. The euro duly sank to depths last seen in mid-2017, sending the safe-haven U.S. dollar and yen surging.