Asian stock markets tumbled on Friday after China's February exports plunged 20.7% year-on-year, far below forecasts of a 4.8% decline and marking the steepest drop since 2016. The data, released during the Lunar New Year holiday, intensified concerns about a potential global economic slowdown already signaled by European central bank warnings.
Citic Securities' rare 'sell' rating on People's Insurance Group of China (PICC) shares exacerbated losses, sending the insurer's stock down nearly 10%. The Shanghai Composite fell 2.9%, its largest single-day drop since October 2018, while Japan's Nikkei and Australia's benchmark declined 2% and 0.9% respectively.
European Central Bank (ECB) President Mario Draghi acknowledged a 'period of continued weakness and pervasive uncertainty' as the bloc revised growth forecasts downward and delayed planned rate hikes. The euro fell to $1.1198, its lowest level against the dollar since mid-2017, while German and French 10-year bond yields hit 2016 lows.
Analysts warned that central bank policy shifts and deteriorating economic data from multiple regions were eroding market confidence. 'These developments are pressing down on market confidence, seen in lower bond yields and equities,' said NAB's Gavin Friend. The U.S. dollar strengthened against major currencies, reaching a 2019 high of 97.537, while oil prices edged lower amid record U.S. crude output.
Market participants now await U.S. February payroll data, with expectations of continued dollar strength against a backdrop of uneven global economic performance. Analysts at ANZ noted that Eurozone interest rates could remain at current levels through 2021, posing challenges for regional banks and the euro's stability.
