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Asian equities plunge as Chinese trade data rekindles worries on global growth

​​​​​​​Mainland banks decline after bad loan ratio rises to 10-year high

MUMBAI (NewsRise) -- Asian shares outside of Japan slumped Monday after disappointing trade data from China brought investor focus back on the global economic outlook.

The Nikkei Asia300 Index fell 1.2% to 1,224.89. Mainland lenders were the biggest contributors to the index's losses. Agricultural Bank of China (ABC) declined 1.4%, Bank of China (BOC) dropped 1.2%, China Construction Bank (CCB) slid 1.4%, and Industrial and Commercial Bank of China (ICBC) shed 1.4%. Data released on Friday showed mainland commercial lenders' non-performing loan ratio came in at 1.89% at the end of December, a 10-year high, according to Reuters.

Earlier on Monday, China reported an unexpected decline in imports and exports for December, renewing concerns over the health of the Asia's largest economy and rekindling worries on the world's economic outlook. Exports denominated in dollars were down 4.4% on-year and imports fell by 7.6% last month, compared with a 3% and 5% increase expected by economists polled by Reuters.

"The weak trade data points to deteriorating demand in China and abroad," said Louis Kuijs, head of Asia Economics at Oxford Economics. He highlighted that the decline in exports pointed to a significant slowdown in global trade growth and the impact of U.S. trade tariffs, and the fall in imports was a function of a slowing Chinese economy.

The U.S. tariffs on Chinese imports and Beijing's retaliation, part of the long-standing trade dispute, have hurt the outlook for the world economy in the current year. Both the countries last week engaged in trade talks to sort out their differences, but no definitive announcements have been made so far.

Among other movers on Monday, India's second-largest software exporter Infosys advanced 2.5% to 700.90 rupees after the company raised its revenue growth guidance for the financial year ending Mar. 31. Infosys also approved a buyback of its stock at a maximum of 800 rupees per share. For the December quarter, the company reported a 30% decline in net profit.

Singapore's CapitaLand said that it will buy two real-estate units of Singapore's investment company Temasek Holdings for S$6 billion ($4.4 billion). CapitaLand said the consideration for the acquisition of Temasek's Ascendas and Singbridge will be in the form of issuance of new shares and cash. Trading in shares of CapitaLand was halted at the company's request ahead of the announcement.

Energy names came under pressure after Brent crude slipped back below $60 a barrel. Hong Kong shares of PetroChina and CNOOC lost 3.2% and 4.7%, respectively, and Thailand's PTT Exploration and Production slid 1.2%. Singapore's Keppel Corp. ended 1.8% lower.

Chinese technology shares came under pressure amid a Reuters report that Poland has arrested a Chinese employee of telecommunication equipment company Huawei on spying allegations. Hong Kong shares of ZTE dropped 3.3% and that of Tencent Holdings slipped 2.8%.

South Korea's Doosan Heavy Industries & Construction added 2.9%. The company said late Friday it had won a contract worth $458 million for a thermal power plant project in Vietnam.

Singapore Press Holdings declined 0.8% after its December quarter net profit fell by 6.8%.

--Nimesh Vora

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