China markets dive on trade data shock

Chinese stocks closed lower yesterday, led by losses in newly listed stocks as foreign trade data for December showed shock falls in both exports and imports.

The benchmark Shanghai Composite Index dropped 0.71 percent to 2,535.77 points and turnover shrank to 116.2 billion yuan (US$17.19 billion).

That compared with 122.3 billion yuan in the previous session. The smaller Shenzhen Component Index ended 0.87 percent lower at 7,409.2 points and the blue-chip CSI300 Index also fell 0.87 percent to 3,067.78 points. Stocks of 15 A-share companies tumbled the daily limit of 10 percent.

China’s December exports unexpectedly fell 4.4 percent from a year earlier, with demand in most of its major markets weakening.

Imports also saw a shock drop, falling 7.6 percent in their biggest decline since July 2016, China’s Customs department said.

The data was far weaker than market expectations, sparking investor concerns about weakness in the world’s second largest economy.

Investors turned to traditionally safe investments such as the gold sector.

The “sub-new” stocks (those having been listed for less than a year) nosedived after jumping at the opening. Xinjiang Communications Construction Group Co, Jiangsu Apon Medical Technology Co and Guizhou Taiyong Changzheng Technology Co were among those who fell by the daily limit.

Pharmaceutical shares were also among the biggest decliners.

Beijing Tiantan Biological Products Corporation lost 8.12 percent, and Chongqing Zhifei Biological Products Co dropped by 6.32 percent.