Japanese Stocks Rise, Halting Three-Day Slide Toward Bear Market

  • Chinese GDP rose 6.8% in fourth quarter, missing estimates
  • Global equity gauge drops to lowest level since July 2013

Japanese stocks rose, halting three days of declines that pushed benchmark gauges close to a bear market, as investors weighed data showing China’s economy slowed to its weakest quarterly growth since 2009 against prospects for increased stimulus.

The Topix index added 0.2 percent to close at 1,390.41 in Tokyo, swinging from a loss of 0.9 percent. The measure is down 18 percent from its high on Aug. 10. The Nikkei 225 Stock Average gained 0.6 to 17,048.37, trading less than two percentage points from a bear-market level. Concern over China’s ability to manage a transition to more sustainable growth has rattled investor confidence in 2016, compounding worries over waning global demand and falling oil prices.
 
“Some of the data missed estimates, but the market was sold off as if we’d see a hard landing in China,” said Nader Naeimi, Sydney-based head of dynamic markets at AMP Capital Investors Ltd., which oversees about $114 billion. “It’s a battle, with data missing some surveys on one side and with the market having predicted much worse on the other.”

Brent oil rebounded after closing at a 12-year low in London as Iran issued an order to boost production in an already oversupplied market. Oil’s selloff, which has dragged crude prices down more than 20 percent this year, and slowing growth in China have ignited a wave of volatility through global financial markets in 2016, pushing indexes from China and Japan to Europe toward bear markets.

Bank Drop

About nine shares fell for every eight that rose on the 1,917-member Topix. Banks and food stocks led declines among the 33 Topix industry groups, with Mitsubishi UFJ Financial Group Inc. dropping 1.9 percent. 

Shin-Etsu Chemical Co. sank 2.3 percent after Macquarie Group Ltd. cut its rating on the stock. Nintendo Co. jumped 9.1 percent, the biggest contributor to gains on the Topix, after Macquarie raised its rating on video-game maker. Sharp Corp. added 2.4 percent after a report that Innovation Network Corp. of Japan may raise its investment offer for the struggling electronics company.

China’s gross domestic product grew 6.8 percent in the three months through December from a year earlier, the statistics bureau said in Beijing, less than the median estimate of 6.9 percent in a Bloomberg survey of economists and the weakest pace since the 2009 global recession. Industrial production rose 5.9 percent in December from a year earlier, compared with the 6 percent median estimate of analysts and November’s 6.2 percent. Retail sales increased 11.1 percent from a year earlier, compared with the 11.3 percent seen by economists.

“Beijing will be anxious to ensure growth momentum does not slow excessively,” said Bernard Aw, a strategist at IG Asia Pte in Singapore. “More stimulus might be in the works in the first half of 2016.”

The MSCI All-Country World Index slipped on Monday to its lowest since July 2013 as banks drove the Stoxx Europe 600 Index to a 13-month low. E-mini futures on the Standard & Poor’s 500 Index climbed 1 percent from Friday’s close. U.S. markets were closed Monday for a holiday.

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