(MENAFN- The Peninsula)A videographer films an electronic board showing the Japan's Nikkei average (Top R) and related indexes at the Tokyo Stock Exchange (TSE) in Tokyo Japan.
HONG KONG: Asian shares edged higher but held near 1-1/2 year lows while commodity currencies such as the Malaysian ringgit weakened further on Monday after Chinese data highlighted a deepening slowdown in demand in the world's industrial powerhouse.
China's stock markets bucked broad cautiousness in Asian equities with major indices up between 2 and 4 per cent on investor expectations of yet another round of policy stimulus.
Financial spreadbetters on Monday expected Britain'sFTSE 100 to open up 0.4 per cent Germany's DAX to edge 0.4 per cent higher and France's CAC 40 to open around 20 points higher.
News of another monthly decline in Chinese exports - its biggest fall in four months - and a collapse in producer prices shows how China's faltering industrial demand has hit global trade and sent emerging market assets reeling.
MSCI's broadest index of Asia-Pacific shares outside Japan edged higher on the day but held near a 1-1/2 year low hit last month. It has fallen 16 per cent since May.
"The markets are beginning to price in structurally lower growth in China and an end to the so-called commodity super-cycle" said Yoshinori Shigemi global market strategist at JPMorgan Asset Management.
While economists have long predicted a slowdown in the pace of China's economic expansion after years of turbocharged growth investors have been taken aback by the scale of the slowdown and the impact it has had on emerging equities have been among the hardest hit as companies struggle to deal with the China factor.
Year to date MSCI's Asia ex-Japan index is down nearly 7.5 per cent in US dollar terms compared to a flat performance from its US counterpart according to Thomson Reuters data.
Though early days yet corporate earnings in Asia have so far only confirmed that trend.
Of the nearly 32 per cent of the companies in MSCI Asia-ex Japan index reporting results so far more than half have led to downgraded estimates for their earnings per share according to Credit Suisse strategists.
China's slowdown comes at a particularly sensitive time for emerging markets as expectations that the US Federal Reserve will end nearly a decade of its zero interest rates soon have gained momentum in recent weeks dealing a further blow to emerging market currencies and commodities.
Malaysia's ringgit hit at a 17-year low as its foreign exchange reserves fell below the $100 billion mark while leveraged funds have increased their short bets on other commodity-linked currencies such as the Canadian dollar and the Australian dollar in recent days.
Recent data have confirmed the economic recovery underway in the United States.
The US Department of Labor said on Friday employers added 215000 jobs in July only slightly below a Reuters poll while the unemployment rate held at a seven-year low of 5.3 per cent with signs that wages were beginning to pick up.
On Wall Street the Dow Jones industrial average fell 0.3 per cent hitting a six-month low. The S&P 500 shed also about 0.3 per cent.
Prospects of higher US interest rates have made the dollar more attractive to investors with the US dollar index which tracks the greenback's performance versus a basket of currencies rising after the US jobs data Prospects of higher US interest rates have made the dollar more attractive to investors with the US dollar index which tracks the greenback's performance versus a basket of currencies rising after the US jobs data o 98.334 its highest since late April before turning lower. On Monday it stood at 97.670.
The euro traded at $1.0957 while the yen was 124.35 to the dollar.
Oil prices kept sliding on the global slowdown a US gasoline glut and a rise in the US oil rig count.
Crude futures prices fell to fresh multi-month lows early on Monday. Brent fell to $48.26 per barrel not far from a six-year low of $45.19 hit in January.
The 19-commodity Thomson Reuters/Core Commodity CRB Index plumbed fresh lows not seen since 2003 with a year-to-date decline of nearly 14 per cent.
Reuters