Market Drivers – Asian Session 18/10/2021

Negativity dominated the performance of Asian stocks after the release of key Chinese economic data.

Japanese stocks closed slightly lower Monday, October 18, as investors took profits after the latest rally, but automakers gained after Toyota hinted that it might meet its full-year production target despite a lack of chips.

The Nikkei Index fell 0.15% to close at 29025.46 after posting its first weekly gain in four weeks last week.

MSCI’s broadest index of Asia-pacific shares outside Japan falls 0.07%.

The Shanghai Composite Index is trading down 0.6%, following the disappointing third-quarter Gross Domestic Product (GDP), which expanded 4.9% YoY basis, below the market expectations of 5.2%.

The broader Topix index lost 0.23% to close at 2019.23, but the Transportation Equipment Industry TOPIX Index rose 1.86% to reach its highest level since 2015.

Data released by the Statistics Bureau of China on Monday morning revealed that China’s economic growth rose during the third quarter of this year, but at a pace weaker than market expectations, and it was the worst reading of the index since the third quarter of last year.

Earlier in the day, the data from China revealed that the Gross Domestic Product (GDP) expanded by 0.2% on a quarterly basis in the second quarter after growing by 1.3% in the second quarter. This reading missed the market expectation of 0.5% and caused risk sentiment to sour during the Asian trading hours.

The dollar rose on Monday after weak economic data in China and rising oil prices worried investors that inflation would raise interest rates.

In the Asian session, the dollar rose slightly, tracking US bond yields, halting the decline it suffered last week. It rose about 0.2 percent against the euro and about 0.1 percent against the yen, pushing the Japanese currency to its lowest level in three years.

The dollar index rose 0.1 percent to 94.102, near its highest level reached last week at 94.563.