Asian shares lower on China data, Wall Street losses

Friday, 21 January 2011 00:01 - - {{hitsCtrl.values.hits}}

HONG KONG, (AFP) - Asian shares fell Thursday after new Chinese growth and inflation data pointed to more policy tightening by Beijing, while weak earnings in the United States hurt financials in Tokyo.

Tokyo shed 1.13 percent by the break, Shanghai was 1.10 percent lower, Hong Kong fell 1.15 percent and Sydney lost 0.97 percent.

Seoul slipped 0.24 percent, a day after hitting a record high.

China said its consumer inflation stood at 4.6 percent in December. While that was down from November’s 5.1 percent, the rate over 2010 came to 3.3 percent, higher than the government’s target of three percent.

The world’s second-biggest economy as a whole grew at a breakneck 10.3 percent last year, up from a revised 9.2 percent in 2009 -- China’s fastest annual pace since the global financial crisis began.

The losses in Shanghai and Hong Kong followed strong gains on Wednesday after a leaked report by Hong Kong-based Phoenix Television previewed the inflation and growth figures.

Analysts said the still-high inflation figure in December supported the case for further interest rate hikes and bank lending restrictions, after a slew of measures taken by Beijing this year in a bid to cool the red-hot economy.

Zheshang Securities analyst Wang Weijun said the “December macroeconomic data has been digested and now eyes will be on January’s inflation numbers and whether that will trigger more monetary tightening”.

Asian trade got off to a poor start after financial shares on Wall Street tumbled. Banking giant Goldman Sachs reported a 52 percent fall in fourth-quarter profit and a 38 percent drop over the year.

The Goldman figures compounded fears over the US economy after December housing starts fell to their lowest level since October 2009.

The Dow fell 0.11 percent, the broad-market S&P 500 lost 1.01 percent and the tech-rich Nasdaq dropped 1.46 percent.

Worries about the pace of the US economic recovery could revive, Kenichi Hirano, operating officer at Tachibana Securities in Tokyo, told Dow Jones Newswires.

The housing data “cast a doubt on US consumption this year”, Hirano said.

On foreign exchange markets the euro fell against the dollar on profit-taking after it hit a two-month high, dealers said.

The single currency bought $1.3438 in Tokyo morning trade, down from $1.3470 in New York late Wednesday.

The euro reached $1.3539 on Wednesday, its highest since November 23, on improved confidence in the eurozone after a well-received debt sale by beleaguered Portugal.

The euro was flat at 110.47 Japanese yen and the dollar was also unchanged at 82.20 yen.

New York’s main oil futures contract, light sweet crude for February delivery, was down 21 cents to $90.62 a barrel and Brent North Sea crude for March delivery rose 40 cents to $98.56.

Gold opened at $1,367.50-$1,368.50 an ounce in Hong Kong, down from Wednesday’s close of $1,374.50-$1,375.50.