Asian shares slow down as global growth concerns return


Asian shares eased on Thursday, as investors showed caution following the outlook for global growth, as they awaited the outcome of the China-U.S. trade negotiations.

Meanwhile, the euro has remained under pressure ahead of the European Central Bank meeting.

MSCI’s broadest index of Asia-Pacific shares outside Japan edged 0.3 per cent lower on Thursday, yet hovering not far from its five-month high, marked last week, and was up 10 per cent year-to-date.

Japan’s Nikkei average fell 0.7 per cent.

Chinese stocks were mixed, with the Shanghai Composite rising 0.2 per cent, while the blue-chip CSI 300 and Hong Kong’s Hang Seng shed 1.0 per cent and 0.7 per cent, respectively.

European shares were expected to open lower, with financial spread-betters seeing Britain’s FTSE, France’s CAC and Germany’s DAX each ticking down between 0.2 and 0.5 per cent.

Overnight, Wall Street’s main indexes fell for a third session, with the S&P 500 posting its biggest one-day decline in a month, as investors sought reasons to buy after the market’s strong rally to start the year.

“For some time, markets had been pricing in good news, namely that the talks between the U.S. and China will likely go well. Now markets are having a pause,” said Tatsushi Maeno, senior strategist at Okasan Asset Management.

Adding to concerns about the talks was data that showed that the U.S. goods trade deficit surged to a record high in 2018 as strong domestic demand pulled in imports, despite the Trump administration’s “America First” policies aimed at shrinking the gap.

Other U.S. data released on Wednesday suggested some slowing in the labor market, though the pace of job gains remains more than enough to drive the unemployment rate down.

The ADP National Employment Report showed that private payrolls increased by 183,000 in February, after surging 300,000 in January.

Economists polled by Reuters had forecast private payrolls advancing 189,000 in February.

The government’s more comprehensive employment report for February is scheduled for release on Friday.

Also weighing on investor sentiment were broader concerns about growth after the Organisation for Economic Co-Operation and Development cut forecasts again for the global economy in 2019 and 2020.

“Chinese macroeconomic data remains weak at the moment, but I expect them to improve by the middle of the year,” said Okasan’s Maeno.

Investors are now looking ahead to the ECB’s board meeting later on Thursday.

Peace PIAK