Asian and European stocks declined on Tuesday after government data showed another fall in Chinese exports, signaling that global demand remained weak at the end of the third quarter.
In US dollar terms, China’s exports fell 3.7% in September from a year earlier, following a drop of 5.5% the prior month, the General Administration of Customs reported Tuesday. Imports also plunged 20.4% from a year earlier compared with a 13.8% fall the previous month. As a result, China’s trade surplus widened slightly to $60.3 billion in September from $60.2 billion the previous month.
China’s export sector is struggling against weak international demand. A revised forecast from the International Monetary Fund (IMF) earlier this month showed global GDP is forecast to grow just 3.1% in 2015, its slowest pace since the 2009 recession year. Growth is forecast to remain modest in 2016.
After a solid start to the month, Asian stocks were mostly down on Tuesday. Tokyo’s Nikkei 225 Index fell more than 200 points or 1.1%.
In China, the CSI 300 Index of Shanghai and Shenzhen stocks dipped 0.1%. However, the benchmark Shanghai Composite Index closed up 0.2%.
Hong Kong’s Hang Seng Index closed down 0.6%.
Stocks experienced a bigger decline in Europe, led by a 1.7% fall in the German DAX. London’s FTSE 100 Index was down 1% in the afternoon session.
The CAC 40 Index in Paris and IBEX 35 in Madrid were each down 1.8%. The pan-European STOXX 600 was down 1.6%.
European stocks were also affected by weak German data showing flat consumer inflation and falling wholesale prices. Germany’s consumer price index (CPI) remained flat in September, as initially expected, government data showed.
Persistently weak inflation was attributed to a 9.3% drop in energy prices. So-called core inflation, which strips away energy costs, rose 1.1% in September.
Wholesale prices were down 0.6% compared with August and 1.8% over year-ago levels.
Energy prices were little changed on Tuesday after falling sharply at the start of the week. The West Texas Intermediate (WTI) benchmark for US crude was up 9 cents at $47.19 a barrel on the New York Mercantile Exchange. Brent crude, the international benchmark, was unchanged at $49.86 a barrel on ICE Futures Europe.
Based out of Toronto, Canada, Husni Sam Borji is senior macroeconomics analysts who contributes regularly to TradersDNA, where he examines the global financial markets. Husni Sam has authored dozens of government reports and industry whitepapers, as well as thousands of financial articles. Husni Sam holds a BA from the University of Windsor and a Master’s degree in Economic Public Policy from McMaster University.
His expertise includes macroeconomics, fundamental analysis, industry research and global political economy.