- Asian shares retreat as China cuts growth target
- Oil prices drop on worries over oil demand
- A rise in Sipchem’s shares boost Tadawul on Monday
- Dollar, gold prices trade mainly flat
Asian shares retreated in early trading on Tuesday after China cut its growth target for this year to 6.0 to 6.5 percent, in line with expectations.
MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.2 percent and Japan’s Nikkei dropped 0.3 percent.
According to a Reuters report, Premier Li Keqiang also said the country sees a budget deficit of 2.8 percent of GDP and the Finance Ministry set the quota for local government’s special bond issues at 2.15 trillion yuan, 0.8 trillion yuan above last year’s quota.
“The increase in local governments’ special bond is fairly large,” Naoto Saito, chief researcher at Daiwa Institute of Research told Reuters.
“Since those funds will be solely used for infrastructure investments, you cannot avoid the impression that the government is relying on investments to support the economy in the short-term rather than de-leveraging. This could cause problems in the longer term.”
Overnight on Wall Street, the Dow Jones Industrial Average dropped 0.79 percent and the S&P 500 fell 0.39 percent.
Oil prices dropped early in the day as investors worried about oil demand growth.
U.S. West Texas Intermediate (WTI) crude oil futures were at $56.30 per barrel at 0210 GMT, down 29 cents, or 0.5 percent, from their last settlement.
Brent crude futures were at $65.36 per barrel, down 31 cents, or 0.5 percent.
“Near term ... it is hard to get very bullish on oil prices. The market is still working off the surpluses built in H2 2018, keeping OECD commercial inventories stuck above the five-year average,” said energy analysts at economic research firm TS Lombard, according to a Reuters report.
Middle East markets
Saudi Arabia’s index rose 0.4 percent on Monday, pushed higher by petrochemical stocks. Sipchem’s shares rose 3.3 percent and Alujain added 0.4 percent.
The Dubai index was mainly flat, with Ajman Bank rising 1.9 percent after the UAE central bank approved cash dividends of 3.5 percent of its capital.
Abu Dhabi's index slid 0.4 percent as Ras Al Khaimah Poultry and Feeding plunged 7.9 percent while Sharjah Islamic Bank lost 5.8 percent.
The Qatar index edged up by 0.1 percent as Mesaieed Petrochemical rose 2.8 percent and Qatar Gas Transport gained 2.3 percent.
Egypt's blue-chip index EGX30 was mainly flat, with Oriental Weavers slumping 5.1 percent after a drop in its fourth-quarter net profit and sales.
Kuwait’s premier market index rose 0.4 percent while Bahrain’s index dropped 0.4 percent and Oman’s index added 0.4 percent.
The dollar held firm early on Tuesday, near a two-week high.
The dollar index, which measures the greenback against a basket of six major currencies, was at 96.668 after going as high as 96.816 the previous day, its strongest since Feb. 19.
Gold was trading near a five-week low on Tuesday.
Spot gold was flat at $1,286.35 per ounce as of 0123 GMT, after touching its lowest since January 25 at $1,282.50 in the previous session.
U.S. gold futures were also steady at $1,287.70 an ounce.
(Reporting by Gerard Aoun; Editing by Mily Chakrabarty)
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