Nikkei, Hang Seng retreat while stocks in mainland China inch up
Asian markets were mixed in early trading Thursday after weaker-than-expected economic data from China and Japan, and reports of a sticking point in U.S.-China trade negotiations.
The Wall Street Journal reported Wednesday that the trade talks were being held up by China’s reluctance to agree on a specific figure for U.S. agricultural purchases. President Donald Trump has said China has agreed to buy $50 billion of farm goods. Rolling back tariffs and enforcement mechanisms are also reportedly still points of contention.
In economic news Thursday, China said its economic activity grew slower than expected in October, up 4.7% from a year ago, and down from September’s 5.8% increase. Economists had expected a 5.2% rise. Data also showed Japan’s economy grew slower than expected in the September-ending quarter, up just 0.2% year-over-year, following a 1.8% expansion in the previous quarter. Economists had forecast a 0.8% gain.
Also Thursday, Australia’s government reported employment fell by a bigger-than-expected margin in October. That prompted expectations the central bank will cut interest rates to prop up economic growth.
Japan’s Nikkei NIK, -0.76% fell 0.7% and Hong Kong’s Hang Seng Index HSI, -0.93% retreated 0.9%. The Shanghai Composite SHCOMP, +0.16% inched up 0.1% and the Shenzhen Composite 399106, +0.61% gained 0.4%. South Korea’s Kospi 180721, +0.79% rose 0.2%, while benchmark indexes in Taiwan Y9999, -0.15% , Singapore STI, -0.25% , Malaysia FBMKLCI, -0.23% and Indonesia JAKIDX, -0.71% fell. Australia’s S&P/ASX 200 XJO, +0.55% rose 0.5%.
Among individual stocks, Yahoo Japan parent Z Holdings 4689, +16.93% , which is controlled by SoftBank 9984, +0.28% , skyrocketed in Tokyo trading after reports that it may acquire chat app Line 3938, +15.38% . Rakuten 4755, -5.76% and FamilyMart 8028, -2.74% sank. In Hong Kong, Tencent 700, -2.32% fell after reporting a 13% drop in quarterly profit. Insurer AIA 1299, -1.74% also declined, while Apple supplier AAC 2018, +3.71% gained. Kia Motors 000270, +1.64% advanced in South Korea, while Foxconn 2354, -1.37% slid in Taiwan. In Australia, BHP BHP, +0.05% was about flat after naming a new CEO, while Beach Energy BPT, +1.29% gained.
Investors are cautions “seemingly on the lack of good news on trade talks with China,” said Stephen Innes of AxiTrader in a report.
“It’s more about China getting locked into a numerical commitment as opposed to balking at the deal,” said Innes. “This is something that needs to get ironed out and certainly not a bridge too far.”
Meanwhile, Fed Chairman Jerome Powell said he expects the U.S. economy to keep growing at a solid pace but faces risks from slower global growth and trade tension.
The Fed cut short-term rates last month for the third time this year, to a range of 1.5% to 1.75%.
On Wall Street, buying focused on safe-play stocks such as utilities, real estate companies and makers of consumer products that tend to pay higher dividends. Banks, industrial stocks and companies declined.
The benchmark S&P 500 index SPX, +0.07% rose 0.1% to 3,094.04, a record. The Dow Jones Industrial Average DJIA, +0.33% gained 0.3% to 27,783.59, also a record. The Nasdaq COMP, -0.05% dropped 0.1% to 8,482.10.
Benchmark U.S. crude CLZ19, +0.58% rose 31 cents to $57.43 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained 32 cents on Wednesday to close at $57.12. Brent crude BRNF20, +0.61% , used to price international oils, advanced 24 cents to $62.61 per barrel in London. It gained 29 cents the previous session to $62.37.
The dollar USDJPY, -0.19% declined to 108.68 yen from Wednesday’s 108.84 yen.