Asia report: Markets mixed amid Chinese property stimulus rumours

by | Nov 21, 2023

(Sharecast News) – Asia-Pacific markets showed a mixed performance at the close of trading on Tuesday, with particular attention paid to developments in the Chinese property sector.
According to Bloomberg, Chinese regulators were drafting a list of 50 eligible property developers that would have access to financing, including companies like China Vanke and Longfor Group.

Additionally, South Korea’s producer prices came into focus as they recorded a slower rate of increase for October.

“Chinese markets found support from the property sector, while the ASX 200 benefitted from strength in the mining and materials sectors, despite a hint of hawkishness in the Reserve Bank of Australia’s tone,” said TickMill market analyst Patrick Munnelly.

“The Nikkei 225 faced uncertainty amid recent strength in the yen, but a decline in Japanese government bond (JGB) yields provided some relief.

“The Hang Seng and Shanghai Composite both saw positive momentum fueled by optimism surrounding property stocks.”

Munnelly noted that reports were that China was drafting a “whitelist” of 50 developers eligible for a boost in financing.

“Furthermore, China has called on government officials to increase financial support for the economy and is actively working on strengthening major economic strategies.”

Markets close mixed after largely positive trading session

In Japan, the Nikkei 225 index dipped by 0.1% to settle at 33,354.14, while the Topix index also saw a slight decline of 0.2%, closing at 2,367.79.

Notable stock movements on Tokyo’s benchmark included GS Yuasa, which fell by 10.82%; Mazda Motor, with a 4.5% drop; and Itochu, down by 3.66%.

The Chinese markets exhibited a mixed trend, with the Shanghai Composite showing a minimal decline of 0.01% to end at 3,067.93, while the Shenzhen Component index slipped by 0.26% to reach 9,997.09.

Key stock movers in Shanghai included EmbedWay Technologies, which recorded a 10.01% decrease, and Duolun Technology with a 7.98% decline.

Hong Kong’s Hang Seng Index experienced a decrease of 0.25%, closing at 17,733.89.

Notable decliners included Xiaomi, down by 4.94%, Lenovo Group, with a 3.35% drop, and Zhongsheng Group, which fell by 3.24%.

In South Korea, the Kospi index showed a positive trend, rising by 0.77% to settle at 2,510.42.

KakaoBank recorded an impressive gain of 8.79%, while SKC also saw a notable increase of 5.44%.

Australia’s S&P/ASX 200 index edged up by 0.28% to reach 7,078.20, led higher by Pexa Group, which surged by 5.84%, and Genesis Minerals, up by 5.4%.

New Zealand’s S&P/NZX 50 index experienced a decline of 0.38%, closing at 11,164.42, with the fallers being led by Ryman Healthcare, down by 3.16%, and A2 Milk Company, which recorded a 2.47% decrease.

In currency markets, the dollar was last down 0.47% on the yen, trading at JPY 147.70, while it decreased 0.12% against the Aussie to AUD 1.5234 and retreated 0.45% on the Kiwi to change hands at NZD 1.6491.

On the oil front, Brent crude futures were last down 0.91% on ICE at $81.57 per barrel, while the NYMEX quote for West Texas Intermediate decreased 0.96% to $77.08.

Producer price, export growth slows in South Korea

In economic news, South Korea’s producer price index (PPI) saw a year-on-year increase of 0.8% in October, indicating a slower growth rate than the 1.3% expansion observed in the prior month.

Additionally, on a monthly basis, the PPI declined 0.1%, marking the first instance of a month-on-month decrease in three months.

The decline was primarily attributed to a notable 5.5% drop in agricultural, forestry, and marine product prices.

At the same time, 20-day exports from South Korea rose 2.2% year-on-year in November, slowing from their 4.6% improvement in October.

Kelvin Lam at Pantheon Macroeconomics said the future trend in Korean exports depended on how solid the rebound in information technology was.

“It appears that firming chip prices is the main driver – so far – rather than a drastic improvement in electronics demand.

“Chinese demand is another cause for concern, whether the improvements witnessed recently can be sustained or not likely depends on how effective the infrastructure driven stimulus is.”

Lam said that the Chinese property market was still foundering, with prices falling more than the official measures were suggesting.

“As a result, we expect Korean exports to warm up only gradually on the back of a soft global demand outlook and hazy semiconductor demand.”

Reporting by Josh White for Sharecast.com.

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