Chinese data, US debt ceiling worries send shares lower

Global shares dipped on Tuesday as traders were kept on edge by weak Chinese trade data and the impasse over the US debt ceiling, which also caused a sharp sell-off in short-dated US Treasury bills.

Crucial US inflation data due on Wednesday that could cause a change in current market pricing for US rate cuts later in the year was top of investors’ minds as well.

Europe’s broad STOXX 600 index (.STOXX) dipped 0.55% but was just about still in touch with mid April’s 14-month high, after MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) had dropped 0.88%, reported Reuters.

The Asian benchmark was dragged down by declines in onshore Chinese blue chips, off 0.86% (.CSI300) and Hong Kong (.HSI) 2.12% lower, after Chinese trade data showed an unexpected decline in imports and slower exports growth, underlining the struggles facing the world’s second-biggest economy despite the lifting of Covid curbs in December.

“When it comes to the Chinese market, you have the question coming from investors now about the strength of the recovery,” said Frank Benzimra, Societe Generale’s Hong Kong-based head of Asian equity strategy.

“So when you have some trend data which is not as good as people expect, it raises doubts,” he said.