Asia’s major stock indexes lacked direction on Friday with uncertainty remaining over when, finally, the US Fed will turn around its interest rates push and how far Beijing is prepared to go to help its struggling economy.
Most shares across the region were dragged lower by losses in China and the absence of guidance from Wall Street, which was closed for the Thanksgiving holiday, while the dollar stayed on the back foot and Treasury yields climbed a touch.
Japan’s Nikkei share average was an outlier, stopping short of a fresh three-decade high, posting a fourth straight weekly gain as a weaker yen buoyed exporters’ stocks.
This was despite data showing that Japan’s core consumer inflation picked up slightly in October, although by less than expected, and factory activity shrank for a sixth month.
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The Nikkei ended up 0.52%, with a 0.12% gain for the week, to close at 33,625.53 and it is up nearly 9% this month. The broader Topix was ahead 0.54%, or 12.75 points, to 2,390.94.
The yen traded flat at 149.25 per dollar, hovering around the same level for a third day. The unit strengthened on Tuesday to a more than two-month high of 147.155 as expectations for a more dovish Federal Reserve undercut the US currency.
China stocks fell as investors remained cautious about the country’s sluggish economic recovery, with strong foreign outflows denting risk sentiment. Recent economic data have been a mixed bag and the economy still remains weak.
The blue-chip CSI 300 Index was down 0.66% and the Shanghai Composite Index fell 0.68%, or 20.88 points, to 3,040.97. The Shenzhen Composite Index on China’s second exchange lost 1.08%, or 20.83 points, to 1,900.59.
Tech giants listed in Hong Kong dropped with the benchmark Hang Seng Index falling 1.96%, or 351.42 points, to close at 17,559.42. The Hang Seng China Enterprises Index declined 2.10%.
Elsewhere across the region, in earlier trade, Seoul, Singapore, Taipei, Jakarta and Bangkok were also down. Manila and Wellington edged higher but Jakarta and Mumbai were flat.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.6% but were still headed for a weekly gain of 0.8%. It is up about 7% in November as investors grew increasingly confident that US rates have peaked, with discussion shifting to the timing and speed of rate cuts.
Eurozone Inflation Fall
The holiday lull was likely to extend to Europe, with Eurostoxx 50 futures mostly flat. Both S&P 500 futures and Nasdaq futures were also little changed.
Overnight, US markets were closed for the holiday. In Europe, slightly better than expected euro zone PMIs nudged the euro and shares higher.
Minutes of the European Central Bank October policy meeting showed euro zone inflation was falling as expected, or even a bit faster, but suggested policymakers needed to keep the possibility of an interest rate hike on the table.
Cash Treasuries fell a little as they resumed trading in Asia, with two-year Treasury yields up 3 basis points to 4.9419% and benchmark ten-year yields up 4 bps to 4.4606%.
In the currency markets, moves were mostly muted. The dollar index, which measures the US currency with six peers, was on the back foot at 103.71, nearing a three-month low of 103.17.
Sterling perched near a 10-week top at $1.2540, as strong results from a business survey led markets to push back bets on when the first Bank of England rate cut might come.
Oil prices extended losses after tumbling more than 1% on concerns over the delayed OPEC+ meeting. Brent crude futures fell 0.2% to $81.26 a barrel.
Gold prices were 0.1% higher at $1,993.63 per ounce.
Key figures
Tokyo – Nikkei 225 > UP 0.52% at 33,625.53 (close)
Hong Kong – Hang Seng Index < DOWN 1.96% at 17,559.42 (close)
Shanghai – Composite < DOWN 0.68% at 3,040.97 (close)
London – FTSE 100 < DOWN 0.34% at 7,457.83 (0934 GMT)
New York – Dow > UP 0.53% at 35,273.03 (Wednesday close)
- Reuters with additional editing by Sean O’Meara
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