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China trade strength supports Asian chip stocks

China’s stronger-than-expected trade figures on Tuesday highlighted resilient demand for its high-technology and vehicle exports, helping support semiconductor shares across Asia. South Korea’s KOSPI rose as chipmakers advanced, while Japanese and Hong Kong equities declined amid higher oil prices and expectations of tighter US monetary policy. European markets finished Monday little changed ahead of the European Central Bank’s policy decision on Thursday and US inflation data due Friday, while US markets were closed for a holiday. US markets were closed on Monday for the Labor Day holiday.

  • Date
  • Author Shane Strowmatt, Senior Investment Writer
  • Reading time 5 minutes

Strategist China
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China’s exports rose 25% year-on-year in August, accelerating from 23.9% in July as overseas demand for vehicles and high-technology goods remained strong, customs data showed on Tuesday. Imports increased 28.2%, following a 27.5% gain in July, widening the country’s trade surplus to USD 119.1 billion from USD 112.5 billion. Strong shipments of electric vehicles, industrial machinery and semiconductors have helped China offset the effect of elevated US tariffs by expanding sales to Southeast Asia, Latin America and Africa. The figures were released ahead of a planned meeting between US President Donald Trump and Chinese leader Xi Jinping later this month, while weak domestic consumption and investment continue to weigh on China’s economy. Mainland China’s CSI 300 fell 0.1% on Tuesday.

Asian stocks mixed as chipmakers rally

Other Asian equities traded unevenly on Tuesday as a rally in South Korean semiconductor shares supported technology stocks, while rising oil prices, higher US Treasury yields and expectations of tighter US monetary policy restrained broader risk appetite. Korea’s KOSPI gained 1%, with SK Hynix and Samsung Electronics driving the index higher, while Japan’s Nikkei 225 fell 0.4% after data released Tuesday showed Japan’s economy expanded at an annualised rate of 1.4% in the second quarter, revised up from the initial 1.1% estimate but slower than the 1.8% pace in the first quarter. Hong Kong’s Hang Seng Index fell 0.6%.

Oil rises on Gulf supply risks

Oil prices extended their advance on Tuesday as concerns over possible disruptions to Middle Eastern energy supplies outweighed tentative signs of diplomacy between Iran and Oman. Brent crude oil futures rose 1.1% to USD 98.09 per barrel, after gaining almost 1% on Monday and 8% last week, while West Texas Intermediate (WTI) futures gained 2.2% to USD 93.46 and were up nearly 10% last week. Iran warned that US energy assets and Gulf oil and gas infrastructure could face retaliation following recent attacks, while proposed restrictions and an alternative shipping route in the Strait of Hormuz raised concerns about slower tanker traffic.

European stocks subdued ahead of key events

European equities began the week cautiously on Monday as investors awaited the European Central Bank’s policy decision on Thursday and US inflation data on Friday, while the US market was closed for a holiday. The Euro Stoxx 50 rose 0.2% to 6403.85 points, supported by technology and artificial-intelligence-related shares. Switzerland’s SMI fell 0.8% to 14,279.38 points, weighed down by Novartis after its pelacarsen trial disappointed and by reinsurer Swiss Re, which warned of mounting wildfire risks.

Euro-area GDP growth accelerates

Euro-area gross domestic product rose 0.6% in the second quarter, following no growth in the first quarter, while EU output increased 0.7% after a 0.1% gain, Eurostat reported on Monday. Annual growth accelerated to 1.2% in the euro area and 1.4% in the EU, as net trade more than offset an inventory drag, while employment grew 0.1% in both regions. Separately, Sentix investor confidence rose to a four-year high of 5.1 points in September from 0.9 points in August, reflecting improved assessments of current conditions and the outlook, particularly in Germany.

Swiss unemployment rate holds steady

Switzerland’s unemployment rate remained at 3% in August, while the number of registered unemployed people rose by 2268 from July to 141,544, SECO reported on Monday. Unemployment was 7.1% higher than a year earlier, while the seasonally adjusted jobless rate held at 3.1%. The number of registered jobseekers was broadly unchanged from July.

Corporate news in focus: There is no major corporate news scheduled today.

Economic data in focus: German trade balance (08:00) and French trade balance (08:45).

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Editor: Alessandro Fezzi
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