Asian stocks retreated on Thursday as poor data out of China, particularly from its property sector, and the lack of any major breakthrough in talks between China’s Xi Jinping and the US’s Joe Biden disappointed investors.
While Biden and Chinese leader Xi had agreed to resume military-to-military communications and cooperate on anti-drug policies, a sign ties were improving, many were underwhelmed by the lack of agreement on trade matters.
New figures showing prolonged weakness in China’s property sector also dented sentiment and the blue-chip CSI 300 Index fell 0.97%.
Also on AF: Report Explains How China Got Round US’s Initial Chip Curbs
The Shanghai Composite Index lost 0.71%, or 21.91 points, to 3,050.93, while the Shenzhen Composite Index on China’s second exchange retreated 1.00%, or 19.28 points, to 1,915.47.
China’s new home prices fell for the fourth month in October, official data showed, as government support measures did little to lift the gloom hanging over the debt-laden property sector.
Data released on Wednesday also showed a sharp drop in property investment, while industrial output and retail sales continued to recover.
Tech giants listed in Hong Kong slumped 2.3% and the benchmark Hang Seng Index dropped 1.36%, or 246.18 points, to 17,832.82. The Hang Seng China Enterprises Index lost 1.41%.
Japan’s Nikkei share average snapped a three-day winning streak as investors chose to lock in profits after a sharp rally in the previous session, with a rebound in US Treasury yields also weighing on sentiment.
The Nikkei index closed 0.28% lower at 33,424.41, reversing gains of 0.28% notched up earlier in the session. It jumped 2.5% on Wednesday, topping the 33,000 level for the first time in nearly two months. For the month, it has risen 8.3%. The broader Topix was down 0.19%, or 4.60 points, to 2,368.62.
Yields on Japanese government bonds were mixed, with those on longer-dated notes inching higher after hitting their lowest in nearly a month in the previous session.
Chip-related stocks fell, with Advantest slipping 1.81% to become the biggest drag on the Nikkei and Tokyo Electron losing 0.1%.
Elsewhere across the region, in earlier trade, Seoul, Sydney, Mumbai, Singapore, Taipei, Wellington and Jakarta were also in the red.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.4% in afternoon trade although the index is up 7.1% so far this month.
US Crude Dips
European markets were set for a lower open, with pan-region Euro Stoxx 50 futures down 0.21%, German DAX futures falling 0.11% and FTSE futures dropping 0.11%.
On Wednesday, US stocks closed slightly higher, as inflation data reinforced investor hopes the Fed is done raising interest rates, while retail stocks were boosted by an upbeat forecast from Target.
The Dow Jones Industrial Average rose 0.47%, the S&P 500 gained 0.16% and the Nasdaq Composite narrowed earlier gains to end flat.
Money market traders have fully priced in the odds that the US central bank will keep rates steady in December, as per the CME Group’s FedWatch tool. They also see the first rate cut of the cycle to kick off in May 2024.
Investors are increasingly pricing in more rate cuts next year with bond yields and the dollar coming under downward pressure. Some of that reversed on Wednesday, with Treasury yields and the dollar rebounding slightly from the previous session’s fall.
The yield on benchmark 10-year Treasury notes was at 4.5039% compared with its US close of 4.537% on Wednesday. The two-year yield , which rises with traders’ expectations of higher Fed fund rates, touched 4.8989% compared with a US close of 4.916%.
In currencies, the European single currency was up 0.1% on the day at $1.0837, having gained 2.47% in a month, while the dollar index, which tracks the greenback against a basket of currencies of other major trading partners, was up at 104.48.
US crude dipped 0.9% to $75.97 a barrel. Brent crude fell to $80.44 per barrel. Gold was slightly higher. Spot gold was traded at $1963.29 per ounce.
Key figures
Tokyo – Nikkei 225 < DOWN 0.28% at 33,424.41 (close)
Hong Kong – Hang Seng Index < DOWN 1.36% at 17,832.82 (close)
Shanghai – Composite < DOWN 0.71% at 3,050.93 (close)
London – FTSE 100 < DOWN 0.39% at 7,457.64 (0934 GMT)
New York – Dow > UP 0.47% at 34,991.21 (Wednesday close)
- Reuters with additional editing by Sean O’Meara
Read more:
Xi Seeks to Reassure The US: ‘No Hot or Cold War With Anyone’
Bank of Japan Seen Ready to End Negative Rates in Early 2024
Analysts Wary Despite China’s Factory, Consumption Growth
Hang Seng, Nikkei Lead Asian Stocks Higher on Soft US Inflation
