China releases worse than expected trade data

Markets were taken by surprise as China released worse-than-expected monthly trade data today (May 8th). Exports fell in April from a year ago by 6.2 per cent in yuan terms compared to expectations for a rise of about 1.5 per cent. 

Imports also fell for the month by 16.1 per cent in yuan terms, compared with forecasts for a fall of about 12 per cent. China’s overall trade with the world tumbled 10.9 per cent in April from a year earlier.

The country's trade surplus has risen to 210.2 billion yuan (£21 billion) from 18.6 billion yuan in March.

Stimulus hopes

"Imports have slowed on account of the housing slump and reduced demand for commodities, while exports have been softened on account of the uneven global recovery," Moody's analyst Alistair Chan wrote in a note seen by the BBC.

Much of the slowdown has been concentrated in the property sector, which has seen prices and sales transactions falling for more than a year, according to the Financial Times.

The trade figures are the latest sign of a slowdown in in the world's second largest economy, which only grew by 7.4 per cent in 2014, its weakest growth for almost 25 years. 

The central bank has cut interest rates twice since November and markets will be watching closely when the country releases its estimate for first-quarter gross domestic product on Wednesday. Beijing has set a growth target of "about seven per cent" this year.

However, the worse-than-expected trade figures boosted shares as investors hope for additional economic stimulus measures.

The China’s Shanghai Composite Index rose 2.3 percent to 4,205.92 today, while the Hong Kong's Hang Seng added 1.1 per cent to 27,577.34.