Asia stocks flavour of the day: Davos with hint of growth worries

A visitor takes a selfie photograph against the backdrop of an illuminated WEF. (Bloomberg pic)

HONG KONG: At Davos, the comments are rolling in from some of the most influential. On the sidelines of the forum, Singapore’s Finance Minister Heng Swee Keat sounded a warning of a “very negative” outcome for the global economy if the US and China fail to come to an agreement on trade.

“Comments and talks at Davos would lead to more recognition of problems like what the Singapore minister said,” Jingyi Pan, a market strategist at IG Asia, said by phone. “Urging from world leaders will help in forming a consensus for faster resolution of trade issues between the US and China.”

Growth jitters

The IMF’s latest warning came as yet another blow for investors, just hours after China released data showing its economic expansion in the fourth quarter was the softest since 2009.

“The IMF is on the right track here,” Ajay Kapur, head of Asia-Pacific and global emerging market strategy at Bank of America Merrill Lynch, told Bloomberg Television. “Things are really slowing down, confidence is terrible, earning revisions have collapsed, CFO confidence has collapsed and this is not a time to sit back and observe.”

At an unusual meeting of the nation’s top leaders on Monday, President Xi Jinping said the Communist Party needed greater efforts “to prevent and resolve major risks,” the official Xinhua News Agency reported, a fresh sign the government is growing increasingly concerned about the pace of growth.

“Concerns over slowing global growth are starting to filter through to financial markets,” Nick Twidale, Chief Operating Officer at Rakuten Securities Australia, wrote in a note to clients.

While the trade war and global economy are casting a pall over proceedings in Davos this year, our Bloomberg Markets Live blog is looking ahead and posing the question: What Will Be the Focus This Time Next Year? Top candidates include the possibility of a US recession, the fate of the UK and whether the largest central banks will see easier monetary policy.

Or, we could all still be talking about the US-China trade war. Even money.