Asia stocks, oil slip as dire China data feed recession fears

SYDNEY (REUTERS) - Asian share markets stumbled on Monday (May 16) and oil prices slid after shockingly weak data from China underlined the deep damage that lockdowns are doing to the world’s second-largest economy.

China’s April retail sales plunged 11.1 per cent on the year, almost twice the fall forecast, while industrial output dropped 2.9 per cent when analysts had looked for a slight increase.

“The data paints a picture of a stalling economy and one in need of more aggressive stimulus and a rapid easing of Covid-19 restrictions, neither of which are likely to be forthcoming any time soon,” said Mr Mitul Kotecha, head of emerging markets strategy at TD Securities.

“China’s weaker growth trajectory will add to pressure on its markets and fuel a further worsening in global economic prospects, weighing on risk assets. We expect further (renminbi) depreciation.”

In Europe, EuroStoxx 50 and FTSE futures both eased 0.3 per cent. S&P 500 stock futures lost early gains to drop 0.6 per cent, while Nasdaq futures fell 0.5 per cent. Both are far from last year’s highs, with the S&P having fallen for six straight weeks.

China’s central bank had also disappointed those hoping for a rate easing, though on Sunday, Beijing did allow a further cut in mortgage loan interest rates for some home buyers.