While China’s data releases did not have an immediate impact on Asian markets, they were wreaking havoc in Chinese commodity futures with particularly massive drops seen in nickel prices. And it was these developments in Chinese commodities futures that continued to develop throughout the session, which saw the S&P 500 Materials sector lose 1.2% and the Aussie dollar lose 0.6%. China’s retail sales and IP missed estimates, but the worst performance was seen by FAI, which grew at 8.1% year-on-year well below expectations for 8.9%. While flooding in Southern China during the period may have weighed on the data, the concern collapse in private sector FAI continued unabated with year-to-date year-on-year growth falling to 2.1% and in pure year-on-year terms it actually decline 1.2%.
Nickel Prices have now seen their worst two-day drop since May. LME Nickel prices fell 4% on Friday, and investors are likely to see some further falls in major ASX Nickel producers Independence Group (IGO) and Western Areas (WSA) today. But major falls were also seen in other elements of the commodity complex as copper lost 2.4% and platinum lost 2.5%.