Asia stocks cheered by China trade surprise

Thursday, 14 January 2016 00:00 -     - {{hitsCtrl.values.hits}}

REUTERS: Asian shares made their first real rally of the year on Wednesday after Chinese trade data beat expectations, offering a rare shaft of light for the global economy.

Japan’s Nikkei jumped 2.6% from a near-one-year trough, while battered Australian stocks gained 1.3%. MSCI’s broadest index of Asia-Pacific shares outside Japan sped ahead by 1.6% and away from its lowest since late 2011.

Even China’s mercurial markets found some relief with the Shanghai Composite Index up 0.8% and the CSI300 index 0.9%.

The good cheer spread to E-mini futures contracts for the S&P 500 which climbed 0.8%.

The gains came after China reported its exports had risen 2.3% in yuan-denominated terms in December, from a year earlier while imports dipped 4.0%.

In US dollar terms, China’s December exports exceeded analyst expectations, falling 1.4 pct from a year earlier, while imports fell by 7.6%. Analysts polled by Reuters had expected exports to fall 8.0% and imports to fall 11.5%.

While investors harbour suspicions about the reliability of the data, on the surface they offered hope that world trade flows were at least stabilising after a dismal 2015.

It also suggested Beijing might prove successful in its increasingly forceful attempts to stabilise the yuan, so dampening fears of a sustained devaluation.

All of which galvanised currency markets where the Australian dollar, often used as a liquid proxy for the yuan, was up half a US cent at $ 0.7036.

With safe-haven suddenly out of favour, the Japanese yen and the euro eased broadly. The US dollar moved up to 118.22 yen from an early 117.61, while the euro slipped to $ 1.0815 from $ 1.0860.

Against a basket of currencies the dollar gained 0.2%.

Likewise, low-risk sovereign debt had to surrender a little of their recent gains and yields on 10-year paper nudged up 3 basis points 2.137%.

The hint of firmer demand from China provided a reprieve for commodity prices, which have been under the hammer for months.