Bulls and Bears

Weak Chinese GDP weighs on Asian markets

STI slides 0.38% despite optimism on Brexit deal, strong Wall Street earnings

The prospect of a Brexit deal and strong earnings on Wall Street should have allowed the week to end on a high note, but Chinese economic data spoilt the party.

China's third-quarter gross domestic product (GDP) missed estimates, with growth slowing to 6 per cent - the weakest reading since 1992.

The downbeat mood saw the Straits Times Index (STI) open 0.1 per cent lower and carry on sliding to finish at 3,114.16, down 11.98 points or 0.38 per cent, and little moved from last Friday's close of 3,113.97.

Elsewhere, Australia, China, Hong Kong, Malaysia and South Korea finished lower. The Shanghai Composite Index had its worst showing in a month after the bleak GDP data release, shedding 1.3 per cent, but Japan's Nikkei 225 bucked the trend on gains made by tech companies.

While the Chinese GDP was a disappointment, other Chinese economic data releases - industrial production and retail sales - beat expectations.

Industrial production continued to be driven by significant infrastructure spending, while retail sales were boosted by purchases of essential items.

"While risk assets are not flashing all green, markets can breathe a sigh of relief," said AxiTrader Asia-Pacific market strategist Stephen Innes. "At least for (Friday), markets have dodged a massive macro bullet out of China."

Chinese fiscal stimulus through measures such as infrastructure projects is set to be a central pillar of growth in this quarter despite uncertainty over the trade war, noted ING Greater China economist Iris Pang, who has raised the bank's forecast for the quarter from 5.8 per cent to 6 per cent.

Trading volume here stood at 1.18 billion shares while turnover clocked in at $901.8 million.

Losers beat gainers 208 to 150, with 19 of the blue-chip index's 30 counters ending in the red.

Thai Beverage was the STI's most active counter with 26.3 million shares traded. The food and beverage player added 2.9 per cent to 90 cents.

Keppel Corp fell 2 per cent to $5.84 after announcing on Thursday that third-quarter net profit fell 30 per cent to $159 million from a restated $227 million a year ago, on the absence of divestment gains.

Singapore's banking trio ended lower. DBS Group Holdings came in 0.6 per cent lower at $24.78, OCBC Bank dipped 1 per cent to $10.74 and United Overseas Bank closed at $25.82, down 0.8 per cent.

Among telcos, Singtel edged down 0.3 per cent to $3.15, while StarHub notched up 0.8 per cent to $1.29.

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A version of this article appeared in the print edition of The Straits Times on October 19, 2019, with the headline Weak Chinese GDP weighs on Asian markets. Subscribe