China stocks lead Asian markets lower after Beijing cuts annual economic growth target
A tumble in Chinese stocks dragged most other Asian benchmarks lower Thursday after China cut its economic growth target.
KEEPING SCORE: Hong Kong's Hang Seng fell 1.1 percent to 24,189.66 and the Shanghai Composite Index in mainland China lost 1.5 percent to 3,230.38. The S&P/ASX 200 in Australia, where commodity producers are highly dependent on Chinese demand, spent most of the day in the red and ended practically unchanged at 5,904.20. Indexes in Singapore, Taiwan and New Zealand also dropped. Other major Asian benchmarks had anemic gains, with Japan's Nikkei 225 up 0.2 percent to 18,751.17. South Korea's Kospi edged up 0.2 percent to 2,002.48.
CHINA TARGET: The communist leaders of the world's second-biggest economy announced an official growth target of about 7 percent, down from 7.5 percent last year. Premier Li Keqiang said in a report to China's ceremonial national legislature that the goal was part of overall efforts to create a "moderately prosperous society," though he added that maintaining stable growth would be more difficult. The new official benchmark comes after China's economy expanded 7.4 percent in 2014, its slowest pace in nearly a quarter century.
THE QUOTE: Analysts said markets had mostly factored the new GDP growth target into prices but the news would still affect Asian trading. The target is "an enviable number no doubt for most major economies," said Nicholas Teo at CMC Markets in Singapore. But "from a domestic point of view, if I were a small business owner in China, 7 percent growth feels almost like a recession if I've been enjoying double digit numbers the last five years."
WALL STREET: U.S. stocks ended slightly lower as investors pulled back after a strong run that saw benchmarks hitting record highs earlier this week. The Dow Jones industrial average lost 106.47 points, or 0.6 percent, to 18,096.90. The S&P 500 gave up 9.25 points, or 0.4 percent, to 2,098.53. The Nasdaq composite fell 12.76 points, or 0.3 percent, to 4,967.14.
ENERGY: Benchmark U.S. crude rose 20 cents to $51.73 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.01 to settle at $51.53 a barrel on Wednesday. Brent crude, the international benchmark, was unchanged at $60.55 in London.
CURRENCIES: The dollar rose to 119.85 yen from 119.73 yen in the previous session. The euro fell to $1.1040 from $1.1077.