Most Asian markets slide as Chinese bond selloff continues, Japan exports improve

Most Asian stock markets were trading lower on Monday (19 December) with the Shanghai Composite down 0.01% at 3,122.58 as of 5.12am GMT. This followed a continued bond selloff in China and Japan reporting good export numbers for November.

The world's second largest economy started witnessing a selloff in the country's bond market last week amid tightening of short-term credit by China's central bank. Also, there rumours that brokers were seeing a liquidity squeeze in the country, which resulted in the decline for China's 10-year bond futures.

In Japan, data from the country's ministry of finance showed that its export performance had improved in November. It had increased 7.4% on-year, amid good demand for semiconductors, ships and metals. While semiconductors exports saw a 24.5% on-year increase in November, exports of ships surged 42.1%. However, this failed to have any positive impact on the stock markets in the region.

The only stock market index in the region that bucked the bearish trend was Australia's S&P/ASX 200, which was primarily due to the country maintaining its AAA credit rating, despite a budget deficit.

Standard & Poor's said that the mid-year budget update would have zero impact on its credit rating. However, it added that this could be changed in a few months if the rating agency does not see much progress.

Indices in the region were trading as follows at 5.49am GMT:

Last week (16 December), the FTSE 100 closed 0.18% higher at 7,011.64, while the S&P 500 Index closed 0.18% lower at 2,258.07.

Among commodities, oil prices were trading in the green amid expectations of a tighter crude supply in 2017 following the recent production cut decisions by both Opec and non-Opec nations. As of 12:40am EST, WTI crude oil was trading higher by 0.85% at $52.34 (£41.94) a barrel, while Brent crude was trading 0.63% higher at $55.56 a barrel.