Hong Kong’s Hang Seng was the biggest loser of the major indices in the region, falling 5.3% on weaker-than-expected Chinese data, which stoked fears of a sharp slowdown in Asia’s biggest economy.
Singapore’s Straits Times dropped 3.6% and fell to a three-month low in the week as local blue chip companies reported disappointing first-quarter earnings.
Korea’s KOSPI fell 3.6%. The Bank of Korea held borrowing costs steady for an 11th consecutive month after inflation eased to a 21-month low of 2.5% in April.
In Australia, the All Ordinaries fell 2.6%, despite some positive domestic data. The unemployment rate fell from 5.2% in March to 4.9% in April – the lowest level since December 2008.
The MSCI China tumbled 6.2%. Imports increased only 0.3% year on year (y/y) in April, reflecting a slowdown in construction and property investments, and fuelling concerns about weakening domestic demand. At the same time, exports grew at the slowest pace in three years, hurt by soft demand from Europe and other emerging markets.
India’s SENSEX dropped 3.2%. The deputy governor of the Reserve Bank of India, Subir Gokarn, said that current inflation risks limit the central bank’s ability to cut interest rates further, following April’s half-a-percentage-point reduction. Central bank intervention to support the falling rupee also weighed on investor sentiment.
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