Stock Market News Today 2018/08/16
Commodities prices tumble in China
A raft of Chinese commodities prices fell on Thursday, with iron ore futures tumbling further from a recent peak and the Australian dollar hovering near an 18-month low as concerns about China’s growth prospects mounted.
Iron ore futures on the Dalian Commodity Exchange dropped 2.9 per cent, while coking coal, used in steelmaking, dropped 1.1 per cent.
On the Shanghai Futures Exchange copper fell 2.3 per cent and thermal coal contracts listed on the Zhengzhou Commodity Exchange dropped 2.4 per cent.
Meanwhile the Australian dollar, which often serves as a proxy for sentiment on China’s economy, kept within striking distance of an 18-month low touched during the previous session, even after rising 0.4 per cent to $0.7258 on positive employment data. Australia is a major exporter of iron ore to China.
The rough patch for commodities comes after data released on Tuesday showed growth in fixed asset investment falling to a record low as industrial production came in softer than expected and retail sales growth slowed during July.
Tencent falls to 1-year low on rare profit drop
Shares in China’s Tencent fell to a one-year low on Thursday after it recorded a rare drop in net profit thanks to a freeze on licenses for new games.
Tencent shares dropped 4.7 per cent to a one-year low in Hong Kong, taking its fall since its January high to 32.6 per cent. The Chinese government earlier this week ordered Tencent to halt sales of video game Monster Hunter: World days after its release while the wider industry is awaiting approval of more than 3,000 games for commercial launch in China.
The social media and gaming company posted a 2 per cent year-on-year fall in net profit for the second quarter and revenues missed analyst expectations.
The Hang Seng index was down 1 per cent.
China to send vice-ministerial trade delegation to US in late August
China’s Commerce Ministry will send a delegation led by vice minister Wang Shouwen to the US for trade talks at the end of August.
The delegation represents the first formal attempt at negotiations since the US imposed tariffs on $16bn of Chinese goods, bringing the amount of goods under tariff to $50bn. The US is threatening tariffs on a much larger range of goods, in a potential blow to China’s export industry.
The delegation travels at the invitation of the American side, the commerce ministry announced on Thursday. It will met with a US delegation led by David Malpass, undersecretary for international affairs at the US Treasury department.
Mr Wang has been the point person within the commerce ministry for the trade war that has dominated Sino-US relations this year. Mr Malpass overseas trade in financial services, an important area where US corporations are seeking market access in China.
China this spring rolled out a host of long-promised investment liberalisation measures in financial services, but has pointedly prioritised access for European and Asian firms.
The Chinese side, which is challenging both US trade tariffs and domestic subsidies for industries like solar at the World Trade Organisation, emphasized that it opposes “unilateral or protectionist” measures.
The onshore renminbi exchange rate, which moves within a trading band of 2 per cent either side of a daily mid point set by the People’s Bank of China, was 0.3 per cent firmer at Rmb6.9141, as it moved off 19-month low hit a day earlier. The offshore renminbi, which is not limited by the band, was 0.4 per cent stronger at Rmb6.9199 to the dollar.
Japan export growth disappoints in July
Japanese exports grew at a slower rate than forecast as shipments to the US pulled back, provisional figures showed on Thursday.
Outbound shipments from Japan rose 3.9 per cent compared to the same period a year earlier, according to the Ministry of Finance. That was below a Reuters poll of economists forecasting 6.3 per cent growth and short of the 6.7 per cent increase in June.
Exports to China grew 11.9 per cent year on year while those to the US, Japan’s second-largest export market in July by value, fell 5.2 per cent.
Imports rose 14.6 per cent, broadly in line with a poll forecasting 14.4 per cent growth.
Those figures resulted in a trade deficit of ¥231.2bn ($2.1bn), outstripping forecasts of a ¥50bn deficit.