(MENAFN- Gulf Times) Shanghai stocks ended at a seven-year high yesterday after another round of weak Chinese data fuelled hopes for fresh stimulus, while the dollar sat around 13-year highs following a forecast-busting US jobs report.
Shanghai added 2.17%, or 108.78 points, to close at 5,131.88 € the highest since January 2008 € while Hong Kong rose 0.21%, or 56.12 points to finish at 27,316.28.
Tokyo pared earlier losses to end marginally lower, dipping 3.71 points to 20,457.19, while Seoul closed 0.14% down, giving up 2.91 points to 2,065.19.
Sydney was closed for a public holiday.
Official data yesterday showed Chinese imports slumped 17.6% in May, a seventh straight fall. Exports dropped for the third successive month, slipping 2.5%.
The figures are the latest to suggest the Asian economic giant is struggling to get back up to speed after growth was recorded at its slowest since 1990 last year.
However, traders took the data as an opportunity to continue buying equities on expectations Beijing will add to its three rate cuts since November as well as other easing measures.
"The economy hasn't yet bottomed out," said Song Qiuhong, an analyst at Shunde Rural Commercial Bank Co in Guangdong province's Foshan city. "The central bank has the incentive to keep rates low."
Elsewhere strong US jobs figures increased the chances of a US interest rate rise before the end of the year, which hit Wall Street and also overshadowed an upward revision of Japanese economic growth. The US Labour Department said Friday the world's biggest economy and key driver of global growth created 280,000 jobs in May.
The figure was far better than forecast and follows a slow start to the year that saw a first-quarter economic contraction partly because of severe winter weather.
The report also showed better wage growth, in an indication of tightening in the jobs market.
While the news suggests the recovery is back on track, it also gives the Fed more ammunition to start raising rates again, weighing on US equities. The dollar surged, hitting 125.86 yen at one point, its highest level since June 2002, before easing slightly. In Tokyo yesterday the greenback was at 125.33 yen.
"Investors have to be prepared for a US rate hike this year given that the US economy has been doing pretty well," Khiem Do, head of multi-asset strategy at Baring Asset Management, told Bloomberg News.
"There are a number of uncertainties out there, especially since equities have performed very well this year."
The yen won a measure of support from figures showing Japan's economy grew 1% in the first quarter, up from an initial estimate of a 0.6% expansion. The news suggested the Bank of Japan (BoJ) would wait before unveiling further monetary stimulus, which would tend to weaken the yen.
The euro was at $1.1156 and 139.82 yen yesterday from $1.1115 and 139.56 yen in US trade, although traders remain concerned about Greece's debt reform talks as Athens and its creditors bicker over the latest demands from Brussels. Oil prices were lower. US benchmark West Texas Intermediate for July delivery fell 47 cents to $58.66 while Brent crude for July eased 42 cents to $62.89 in afternoon trade. Gold fetched $1,173.88 compared with $1,174.44 late Friday.
In other markets, Taipei rose 0.30%, or 28.30 points, to 9,368.43; Wellington added 0.31%, or 17.91 points, to 5,885.81; Manila closed 0.56%, or 41.81 points, lower at 7,484.89; Kuala Lumpur fell 5.88 points, or 0.34%, to 1,739.45; Bangkok edged up 0.06%, or 0.91 points, to 1,508.28; Singapore fell 0.40%, or 13.34 points, to 3,320.33 and Jakarta ended down 1.68%, or 85.58 points, at 5,014.99.
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