By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — Japanese and South Korean shares fell Wednesday while stocks in Shanghai and Hong Kong rebounded in volatile trading after China reported an unexpected decline in exports.
Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -0.39% ended the day 0.4% lower, while South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -1.50% lost 0.3%. Both were pressured after China reported a 3.1% year-on-year drop in June exports and a 0.7% contraction in imports, against expectations of an increase.
Andy Ji, a strategist at Commonwealth Bank of Australia, said a continued crackdown by the government on the practice of inflated export receipts likely dampened the data.
/zigman2/quotes/210598065/realtime DJIA 29,219.98, -128.05, -0.44%
“The robust momentum seen in the first four months of 2013 appears to be subsiding quickly, reflecting the more challenging external environment as well as the sizable appreciation in the domestic currency against those of China’s main trading partners,” Ji said.
China is a major trading partner and an exports destination for a number of Asian countries.
Meanwhile, Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -0.33% added 0.4%, and in Hong Kong, the Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -0.96% finished 1.1% higher.
The Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP +0.19% erased early losses to end the day 2.2% higher, on a wave of buying in beaten-down financial and property shares in the afternoon session.
The gains came amid expectations policy makers will ensure economic stability.
“The June interbank liquidity squeeze is finally over, but market concerns on China’s growth outlook and the health of the financial system remain. We believe the new Chinese leadership values growth,financial market stability and policy continuity,” Bank of America Merrill Lynch economists wrote to clients.
They added that policy makers will employ a “practical approach” and control risks, instead of using “shock therapy.”
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Stock gains in Hong Kong were underpinned by Chinese banks Wednesday, while the property, financial and mining sectors led the advance in mainland stock markets.
The Hong Kong-traded shares of China Construction Bank Corp. /zigman2/quotes/208974133/delayed HK:939 -0.46% /zigman2/quotes/207732534/delayed CICHY -0.83% and Bank of China Ltd. /zigman2/quotes/204682472/delayed HK:3988 -0.62% /zigman2/quotes/201568493/delayed BACHY -0.88% rose 1.9% and 2%, respectively.
In Shanghai, Poly Real Estate Group Co. /zigman2/quotes/201864015/delayed CN:600048 -2.30% jumped 5.4%, China Coal Energy Co. /zigman2/quotes/200280825/delayed CN:601898 -0.22% /zigman2/quotes/205321671/delayed CCOZY -1.24% rose 3% and Citic Securities Co. /zigman2/quotes/210326178/delayed CN:600030 -0.51% /zigman2/quotes/207216844/delayed CIIHF -8.45% advanced 3.3%.
The Chinese trade data Wednesday came against the backdrop of an improvement in the U.S. economic and employment outlook, which helped stocks on Wall Street extend their rally Tuesday, pushing the Standard & Poor’s 500 Index /zigman2/quotes/210599714/realtime SPX -0.38% closer toward its all-time high.
Several energy shares gained as U.S. benchmark oil prices ended at their best level in 14 months.
Following those gains, Santos Ltd. /zigman2/quotes/207349564/delayed AU:STO -1.86% climbed 1.8%, and Woodside Petroleum Ltd. /zigman2/quotes/203437212/delayed AU:WPL -0.15% /zigman2/quotes/206334215/delayed WOPEY -1.30% rose 0.4% in Sydney, while PetroChina Co. /zigman2/quotes/204979431/delayed HK:857 -1.17% /zigman2/quotes/205108732/composite PTR -1.26% added 1.6% in Hong Kong.
BHP Billiton Ltd. /zigman2/quotes/201448516/delayed AU:BHP -0.78% /zigman2/quotes/208108397/composite BHP -1.54% and Rio Tinto Ltd. /zigman2/quotes/200083756/delayed AU:RIO -0.46% /zigman2/quotes/202627887/composite RIO -0.28% rose 0.7% each, and Alumina Ltd. /zigman2/quotes/210515632/delayed AU:AWC +0.45% rallied 3.9%.
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The losses in Japan and South Korea came a day ahead of monetary-policy decisions by their respective central banks.
In Tokyo, some technology shares retreated after recent advances, with Trend Micro Inc. /zigman2/quotes/206023532/delayed JP:4704 0.00% /zigman2/quotes/205788499/delayed TMICY -0.51% losing 1.2%, and Toshiba Corp. /zigman2/quotes/205628942/delayed JP:6502 -1.07% /zigman2/quotes/204149068/delayed TOSYY -3.05% shedding 1.4%.
Gains for consumer and retail stocks supported the market, with Suntory Beverage & Food Ltd. /zigman2/quotes/200757604/delayed JP:2587 -1.29% rising 2.8%, and Asahi Group Holdings Ltd. /zigman2/quotes/206211507/delayed JP:2502 -0.50% /zigman2/quotes/206908476/delayed ASBRY -5.05% climbing 2%.