Markets were mostly weaker in Asia on Friday, with the antipodean bourses the exception, as another Chinese property play found itself in the spotlight in Hong Kong.
In Japan, the Nikkei 225 was down 29.611.57, as the yen weakened 0.11% against the dollar to last trade at JPY 113.88.
Fashion firm Fast Retailing was up 1.02%, while among the benchmark’s other major components, automation specialist Fanuc was down 0.46% and technology conglomerate SoftBank Group lost 0.34%.
The broader Topix index lost 0.69% by the end of trading in Tokyo, closing at 2,041.42.
On the mainland, the Shanghai Composite was off 1% at 3,491.57, and the smaller, technology-heavy Shenzhen Composite was 0.77% weaker at 2,406.42.
South Korea’s Kospi was 0.47% lower at 2,969.27, while the Hang Seng Index in Hong Kong led the region’s losses, dropping 1.41% to 24,870.51.
Chinese property developers were in the red in the special administrative region, with China Evergrande down 2.54%, China Vanke off 1.39%, and Sunac China plunging 6.78%.
Those moves came after Hong Kong shares in sector peer Kaisa Group, along with several affiliates, were suspended from trading.
Kaisa Group confirmed on Thursday that its finance operation had missed a payment on one of its wealth management products, leading to liquidity fears.
“The property developer has been suspended from trading pending an announcement containing inside information, following missed payments on wealth management products yesterday and a statement from the company referring to ‘unprecedented pressure’ on liquidity,” said Pantheon Macroeconomics chief China economist Craig Botham.
“With total liabilities of CNY 231bn in 2020, to Evergrande’s CNY 1.95tn, Kaisa is smaller than the crisis poster child, but it is still China’s 25th largest developer by sales, and its third-largest dollar debt borrower, with $3.2bn in bonds maturing between now and the end of next year.
“Multiple developers have seen their shares drop significantly on the news, and an index of Chinese high yield dollar debt fell around 2%, extending the largest weekly decline in a month.”
Botham said the People’s Bank of China was “grudgingly responding” by moderating liquidity withdrawals, as reported on Thursday.
“Gross injections on Friday were increased to CNY 100bn, from CNY 50bn on Thursday, for a net withdrawal of CNY 100bn.
“Given the pressure on not just offshore but increasingly onshore bond markets, we think further action will be needed, and maintain our call for a RRR cut this quarter.
“It seems that Evergrande’s success in averting outright default led to some complacency among the authorities and investors regarding China’s property market.”
Kaisa, Craig Botham said, should refocus attention.
The blue-chip technology stocks painted a mixed picture in Seoul, with Samsung Electronics down 0.57%, while SK Hynix rose 0.94%.
Oil prices were higher as the region entered the weekend, with Brent crude last up 0.5% at $80.94 per barrel, and West Texas Intermediate advancing 0.85% to $79.48.
In Australia, the S&P/ASX 200 managed gains of 7,456.90, while across the Tasman Sea, New Zealand’s S&P/NZX 50 was ahead 1.01% at 13,074.61.
The down under dollars were both weaker against the greenback, with the Aussie last off 0.42% at AUD 1.3570, and the Kiwi retreating 0.31% to NZD 1.4123.
