HONG KONG (MarketWatch) — Asian stock markets kicked off the week in a downbeat fashion Monday, with Japanese equities weighed by news that the economy shrank last quarter, while China and Hong Kong eked out modest gains following upbeat trade data released over the weekend.
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Taiwan’s Taiex lost 0.4%, and Australia’s S&P/ASX 200 index /zigman2/quotes/210598100/delayed AU:XJO -1.60% declined 0.3%.
Singapore’s Straits Times Index was little changed, off 0.1% in late trade.
A series of above-forecast economic data helped China buck the trend, however, with the Shanghai Composite Index /zigman2/quotes/206600939/delayed CN:000001 -1.25% up 0.5% and Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +0.27% gaining 0.2%.
The Asia Dow was off 0.4%.
Japan heading for recession?
Japanese data released Monday showed its economy shrank 3.5% on an annualized basis in July-September, with weakness for exports — particularly for cars and computer chips — reportedly helping drive the contraction. Read: Japan's economy shrinks 0.9% in July-September
Analysts at Nomura said Japan was headed for a recession as the October-December quarter was also likely to show a contraction.
“As a significant improvement in the export environment is unlikely until around end-2012, we expect October-December real GDP to post negative growth as well,” Nomura analysts said in a note following the GDP release
Yoji Takeda, a fund manger with RBC Investments Management, said he was hopeful of additional stimulus measures in the weeks ahead, noting that the government and Bank of Japan last month could act independently or in unison to boost the economy.
But he said that investors were growing weary after repeated disappointments.
“This is a very difficult period for equity managers,” Takeda said. “I guess there is always hope for some kind of change, especially with the formation of the new government, after the expected election, [which is likely to be] within a few months.”
U.S. economic `shadow’
The losses in many of the Asian markets came after U.S. stocks closed Friday with modest gains but still ended the week lower amid the possibility of more than $600 billion of tax hikes and spending cuts — the so-called fiscal cliff — that some economists fear could tip the U.S. into a recession. Read: U.S. stocks edge up but post weekly losses
But while “uncertainty over resolving the U.S. fiscal cliff continues to cast a long shadow over markets,” as Credit Agricole put it, recent days have also seen the release of a slew of better-than-expected Chinese economic data. Read: China posts upbeat data amid leadership change