Asian markets resume sell-off on lingering China fears

HONG KONG : Asian shares tumbled again on Monday, with Shanghai plunging over five percent, after more weak data reignited concerns about China’s economy following a global stocks rout at the start of the year.

After enjoying some minor relief on Friday, the region’s bourses were once again in the red as investors dumped equities. Oil prices also headed south, sitting around 12-year lows.

Asia’s gains at the end of last week failed to reassure US and European markets, which ended in negative territory on Friday as a strong US jobs report was overshadowed by fears about China and its leaders’ ability to manage a slowdown.

Head of investment strategy at asset managers Perpetual in Sydney Matthew Sherwood has said “the market is concerned about China’s financial stability.” People are also quite nervous about the Chinese economic outlook. China is certainly slowing on a very gradual path down. A lot of people are fearing a hard landing is in play.

On Saturday official figures showed Chinese consumer prices picked up slightly in December but inflation remained about half the government’s target. Prices paid at the factory gate, a guide to future inflation, also sank for a 46th consecutive month.

The figures are the latest highlighting weakness in China, which is expected to have grown in 2015 at its slowest rate in a quarter of a century. On Monday Shanghai closed down 5.3 percent, while Hong Kong gave up 2.4 percent in late trade.

Sydney ended 1.2 percent lower, Seoul slipped 1.2 percent and Singapore was 2.0 percent off. Tokyo was closed for a public holiday.

Investors extended losses from last week, which was one of the worst starts to a year on record with dealers rattled after trade was suspended twice in four days in Chinese markets. Shanghai ended the week about 10 percent lower, in echoes of a sell-off that fuelled global turmoil in the summer.



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