Tepid Chinese economic data weighs on market sentiment

Fairly disappointing Chinese economic data weighed on market sentiment in early trade today, adding pressure to Asian equity markets. Industrial output increased by 17.9% in February missing analysts’ expectations of 19.4%, while retail sales rose by 8.6% in February compared to 9.7% in previous month. The Hang Seng index has retreated by 0.67% and the Nikkei index has also fallen into negative territory amid concerns over a further slowdown of the Chinese economy.

European equity markets have been trading sideways in early trade today, looking for some direction. The euro hit a fresh 2-1/2-year high, trading above 1.395 against the US dollar.

The UK RICS housing survey showed that house price growth eased in February with the price balance slowing to +45 compared to +53 in January.   

New Zealand became the first developed nation to increase interest rates since the US commenced its QE tapering programme, citing a surge in the country’s dairy exports and a strong recovery in the construction sector. The Reserve Bank of New Zealand increased interest rates by 0.25% to 2.75% early this morning.   

Oil: Brent futures edged higher holding above $108 per barrel, supported by the on-going political uncertainty in Ukraine. In addition, OPEC said that global oil demand will increase more than expected in 2014, raising its prediction for a second consecutive month due to a steady but strong economic recovery in the US and Europe.  

Gold extended gains for a third consecutive trading session, eyeing a fresh six-month high as investors are looking for opportunities to hedge their positions against the geopolitical tensions in Ukraine and economic slowdown concerns in China.

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