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Daily Scan: Stocks tumble as deflationary pressures rock Asia

By NexChange
Capital Markets

Updated throughout the day

October 14

Good evening everyone. Asian equities extended their declines today as inflation figures from China, Japan, and India all added to worries that deflation is on the horizon. The Hang Seng Index ended the day down 0.71%, while the Shanghai Composite and the Nikkei 225 finished the session down 0.91% and 1.89% respectively. As for the rest, here’s how they fared:

Hang Seng China Enterprises Index: -0.99%
Shenzhen Composite: -1.20%
Straits Times Index: -0.37%

Over in Europe, things aren’t looking too hot either. The FTSE 100 – at pixel time down 0.65% – seems to be on the way to its third straight decline, while the DAX and CAC – saying goodbye to what was a decent start to the month – are currently down 0.79% and 0.67% respectively.

Here’s what else you need to know:

U.K. unemployment falls to seven-year low. Guess it wasn’t all bad news in fair Brittania. The U.K.’s Office of National Statistics has just reported that the region’s unemployment rate has fallen to 5.4% – a level unseen since the March quarter of ’08, while the employment rate – the proportion of people aged from 16 to 64 who were in work – climbed to 73.6%, its highest since recording began in 1971. Inflation was pegged at -0.1% yesterday though, take note of that, Janet. Office of National Statistics

Japanese producer prices fall to a near six-year low. Japan’s producer price index fell 3.9% from a year ago in September, punching in its sixth-straight month of price deflation and posting its worst decline since November 2009. That 2% inflation rate target set by the BOJ looks even further away now. MarketWatch

China CPI misses estimates. The consumer price index in the world’s second largest economy came in at just 1.6% for September, well below August’s 2% reading and less than the 1.8% analysts were expecting. The producer price index meanwhile fell 5.9% from the year before, in-line with estimates. Barron’s

Singapore weakens the SGD. Despite seeing its economy – widely expected to contract – narrowly escape recession, the Monetary Authority of Singapore decided to ease its monetary policy today by weakening the dollar “slightly.” While its GDP figures were better than expected – its June quarter data was also revised higher from -4% to -2.5% – on a year-on-year basis, growth has been measly 1.4% – its weakest showing since 2009. Monetary Authority of Singapore / Ministry of Trade and Industry (pdf)

PBOC clips yuan’s eight-day winning streak. The yuan lost most of its hard-earned gains today as the People’s Bank of China fixed its mid-point price down 0.3% to 6.3408 to the dollar. Offshore yuan was trading as high as 6.3487 against the greenback. SCMP (paywall)

Vehicle sales climb for first time in six

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