China says inflationary pressures now abating; Asian stocks mostly lower
City Index February 29, 2012 3:30 PM
<p>Asian stocks were mostly lower as trading resumed today, falling on the back of comments from Chinese authorities. The regional MSCI Asia Pacific index was […]</p>
Asian stocks were mostly lower as trading resumed today, falling on the back of comments from Chinese authorities. The regional MSCI Asia Pacific index was 0.9% lower in afternoon Tokyo trading.
One of the worst performers was the Hang Seng China Enterprises Index, reflective of Chinese exposures listed in Hong Kong, which declined by 1.9% following the comments from Premier Wen Jiabao that China is targeting economic growth of 7.5% for 2012. This is lower than market expectations and the lowest rate of growth since 2004.
The Australian dollar was also lower, falling to 1.0706 against the US dollar. The Reserve Bank of Australia (RBA) is expected to maintain rates unchanged at its monthly meeting tomorrow.
The Euro similarly declined, now back below 1.32. The US dollar’s gains against the Japanese Yen continues, last buying 81.41. In commodities, gold was soft at US$1713/oz while copper was also slightly lower at US$3.89/lb.
Regional economic news was dominated by China in a speech that Premier Wen Jiabao delivered to about 3,000 officials at the annual meeting of the National People’s Congress in Beijing today.
The good news from the comments, if any, was that inflationary pressures are now starting to moderate and the official target has been maintained at 4% for the remained of 2012. Friday’s official inflationary numbers for February will be an important reading into pricing pressures.
Elsewhere in the region, India’s largest motorcycle maker Hero MotoCorp is reported to be interested in Ducati Motor Holdings – maker of luxury motor bikes, known around the world for its elite status. Shares in Hero were down around 2.3% going into the afternoon trading session. Hero decided to end a 26 year partnership with Honda Motors in late 2010, the world’s largest motorcycle maker, and now looking to gain technology through partnerships and acquisitions after that licensing relationship winds up in 2014.
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