China worries leave markets lower

Asian stock markets were mostly lower today as data suggesting a slowdown in China raised concerns that its economy might not have the momentum needed to help sustain a global recovery.

In Japan, export-reliant companies like Toyota Motor felt pressure as the dollar gave up some of its recent gains against the yen.

The Nikkei 225 index fell 0.2% to 10,120.63. South Korea’s Kospi index dropped 0.3% to 2,035.34.

In Australia, where economic growth is tightly bound to sales of its raw materials to China, the S&P/ASX 200 was 0.1% lower at 4,273.80.

Benchmarks in Singapore and Indonesia also fell. Hong Kong’s Hang Seng was flat at 20,885.39. Mainland Chinese shares rose.

Worries over the pace of the slowdown in the world’s second largest economy were fuelled by comments from mining giant BHP Billiton, which warned that Chinese demand for iron ore, which is used for making steel, was flattening.

Analysts at Credit Agricole CIB in Hong Kong attributed a recent deterioration in investor sentiment to the slowdown in China. But they said China’s growth should remain solid enough to exceed the government’s target and “to support the region”.

“We believe that China is slowing but the deceleration will continue to be gradual,” analysts said in an email.

The weaker demand for iron ore hurt some of the region’s major steelmakers. Japan’s Nippon Steel fell 1.7% and JFE Holdings tumbled 2.5%. South Korea’s Posco shed 2.3%.

In another sign of cooling growth in the world’s second largest economy, new home prices dropped in 45 Chinese cities in February as the government implemented measures to cool property speculation.