Japan’s Nikkei leads gains in Asia while most regions down over growth fears on downbeat Chinese data
Asia’s share markets were mixed on Thursday as investors returned from the holidays to take stock following last week’s sell-off and digest disappointing Chinese inflation data and easing trade tensions with North Korea.
With Wall Street’s Dow Jones industrial average and broader S&P 500 falling, Tokyo’s Nikkei opened 1.3% higher, led by tech stocks. Other Asian share markets followed suit as investors went on holiday after the turmoil over comments by US president Donald Trump that he was considering pulling the US out of the North American Free Trade Agreement with Canada and Mexico.
Despite Trump’s warning that he could quit NAFTA, the three countries did not press ahead with the scheduled summit of finance ministers from the Group of 20 leading economies.
Tokyo’s Nikkei 225 hit its highest level in nearly two months. Technology stocks recovered to a large extent from a sell-off in the past two weeks.
South Korea’s Kospi was down 0.4% and other markets in Asia were down between 0.5% and 1.5%. Australia’s S&P/ASX 200 was down 0.3%.
There was speculation over Chinese tourism curbs and a drop in the index of Chinese manufacturers that cast a pall over exporters in Asia. Both measures were aimed at reducing pollution and stopping air and water pollution, but travel companies are concerned about Chinese air travellers cancelling their Chinese vacations and taking a break from traveling altogether.
The Shanghai Composite index dropped 1.1%, while the Hang Seng in Hong Kong shed 0.6%.
Japan’s Nikkei 225 rose 1.3% to 21,171.78. The broader Topix index rose 0.3% to 1,465.94.
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Chinese share markets have started the week off in negative territory with stocks falling 1% overnight in Shanghai and 1.8% in Shenzhen on Thursday as Beijing announced fresh measures to ensure growth continues to momentum.
Data released on Thursday showed China’s factory gate inflation fell to a seven-month low in September while producer prices fell for a 15th month in a row, raising more fears about the health of the economy. The weaker inflation is likely to give Beijing more leeway to cut interest rates further to support economic growth.
China’s consumer price index (CPI) was unchanged in September from the previous month. On a year-on-year basis, the CPI dipped to 1.9% from 2.0% in August.
“A rise in consumer inflation momentum has been expected due to higher import prices and the general fall in energy prices,” said Neil Shearing, chief emerging markets economist at Capital Economics. “However, consumer inflation remains well below the government’s target of 4% and even at 1.9% is pretty modest by historical standards.”
Factory prices have also been weak, with the producer price index, a broad measure of factory price inflation, down 1.8% in September from a year earlier, the 15th consecutive month of decline.
Investors were also worried about the mood of the Chinese consumer after Apple’s iPhone X went on sale in China, the world’s largest smartphone market.
Tech companies regained some of the ground they lost in recent weeks, led by Toshiba Corp., which jumped 7.5% after the court in Tokyo concluded that a sale of its chip unit to US chip maker Broadcom was lawful.