Asia: Most stocks up as disappointing Chinese data brings hopes of further stimulus

LONDON (ShareCast) - Most Asian indices started the week higher despite disappointing data from China. The Shanghai composite index was up 2.17% and Hong Kong's Hang Seng gained 2.73% as trade data gave investors hopes of further economic stimulus.

The Chinese trade surplus fell to $3.08bn in March from $60.62bn the previous month, compared to analysts' estimates of $40.20bn.

Exports declined by 15% in March, below predictions for a 10% gain and following a 48.3% jump in February. Imports dropped 12.7% last month after a 20.5% slide in February, more than the 10% fall expected.

The General Administration of Customs said the decline was due to weak external demand, the slowdown in China's economic growth and the fall in international commodity prices.

Craig Erlam, senior market analyst at Oanda, said "poor data only supports the need for the People's Bank of China (HKSE: 3988-OL.HK - news) to cut rates further which gives investors that little boost they crave so much".

"At first glance, it's easy to be disappointed but once February's 48.3% surge in exports are taken into consideration, the forecasts seem quite optimistic," he added.

Capital Economics analysts also said the slump in China's exports was the result of seasonal disruption to output rather than weakness in demand.

"On the import side, the headline figures still look awful, but once we account for the impact of lower commodity prices, the picture is not too bad." However, the Nikkei 225 fell slightly by 0.01% after the Bank of Japan released their minutes with consensus remaining that the troubled economy is recovering slowly and that easing should continue until 2% inflation is reached.

In economic news, machinery orders increased to 5.9% year-on-year in February from 1.9% the month before. Month-on-month, orders declined 0.4%, an improvement from -1.7% in January and expectations of a 2.8% decrease.

Domestic corporate goods price also rose to 0.7% in March from 0.5% in February, which was better than forecasts of a 0.4% increase.

Australia's ASX fell 0.12% as it felt the effects of the Chinese slowdown.

In corporate news, Australian oil and gas company Santos gained 1.6%, while mining group BHP Billiton (NYSE: BBL - news) fell 2.39%. Citigroup (NYSE: C - news) downgraded its rating to 'neutral' from 'buy' due to the iron ore price downgrade.

Iron ore prices stayed below $50 per tonne in Asia on Monday, which prompted UBS (NYSEArca: FBGX - news) to cut its 2015-19 iron ore forecast by 20-30% to $48-55 per tonne and the long-term price by $20 per tonne to $55 per tonne.

As a result, BHP's rival Rio Tinto (Xetra: 855018 - news) was also down by 2.79%.

Elsewhere in Japan, Nintendo gained 4.52% as the company announced a spin-off of Monster Hunter Stories game series for the Nintendo 3DS.