Cyber Monday Deal: Up to 60% off InvestingProCLAIM SALE

Asian stocks drift lower amid recession jitters, mixed Chinese GDP

Published 01/17/2023, 12:24 AM
Updated 01/17/2023, 12:32 AM
© Reuters
JP225
-
HK50
-
IND50
-
NSEI
-
KS11
-
TWII
-
BSESN
-
SSEC
-
CSI300
-

By Ambar Warrick

Investing.com -- Most Asian stock markets retreated on Tuesday amid heightened fears of a global recession this year, while mixed economic growth data from China also brewed more uncertainty over the timing of a recovery this year.

China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell 0.3% and 0.4%, respectively, after data showed that the country’s economic growth slowed sharply in 2022 from the prior year.

Economic activity still expanded at a better-than-expected pace during the fourth quarter. This, coupled with positive readings on industrial production and retail sales for December, showed that some facets of the world’s second-largest economy were beginning to recover.

But uncertainty over a bigger recovery persisted, given that the country is grappling with its worst yet COVID-19 outbreak.

Other China-exposed stock markets traded in a flat-to-low range. The Taiwan Weighted index moved little, while South Korea’s KOSPI and Hong Kong’s Hang Seng index shed 0.8% and 1.1%, respectively.

Broader Asian stocks retreated amid renewed concerns over a global recession. A World Economic Forum survey showed that two-thirds of the economists polled expected a recession this year, while a separate survey of business heads by PricewaterhouseCoopers also posited a glum outlook for the economy this year.

Asian markets are likely to see extended losses in the event of a recession, given that foreign capital flows into the region are likely to dry up in such a scenario. An economic slowdown in major economies also threatens to spill over into regional markets.

Focus is now on the fourth-quarter earnings season, with markets looking to gauge whether worsening economic conditions dented corporate profits.

But on the other hand, some Asian markets benefited from improving economic conditions. India’s Nifty 50 and BSE Sensex 30 indexes were among the few outliers for the day, rising 0.5% and 0.8%, respectively, after data showed wholesale price index inflation eased more than expected in December.

The reading portends less pressure on the economy from rising prices, and is likely to invite a less hawkish stance from the Reserve Bank. But separate data showed that India’s trade deficit widened further in December.

Japan’s Nikkei 225 index rose 1.2%, bouncing back from steep losses over the past two sessions. Focus is now squarely on an upcoming Bank of Japan policy meeting, with traders fearing any more unexpectedly hawkish signals from the central bank.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.