Asia report: Stocks mostly lower, Nikkei continues rally

(Sharecast News) - Asian markets experienced a mixed performance on Friday, after China's annual exports recorded their first decline in seven years.

However, equities in Japan stood out as a particular exception, as the Nikkei extended its record rally.

"Asian stocks exhibited mixed results, with major indices largely remaining range bound," said TickMill market analyst Patrick Munnelly.

"The geopolitical landscape contributed to market sentiment, particularly following joint strikes by the US and UK on Houthi targets.

"Additionally, investors were digesting Chinese inflation and trade data, which likely influenced trading dynamics in the region."

Munnelly noted that the Nikkei 225 had rallied more than 6% over the week, driven by strong earnings from Uniqlo owner Fast Retailing.

"The Hang Seng and Shanghai Composite struggled for direction despite mixed Chinese trade data and deflationary Chinese inflation figures on a year-on-year basis."

Japan rises higher, rest of region mostly in the red

In Japan, the Nikkei 225 index displayed resilience, surging by 1.5% to reach 35,577.11 points, while the Topix index also posted gains, rising by 0.46% to 2,494.23.

Among the leading players on Tokyo's benchmark was Fast Retailing with a 6.34% increase, while Sumco and Recruit Holdings gained 5.13% and 4.89%, respectively.

Mainland China faced a less favourable market environment, with the Shanghai Composite slipping 0.16% to 2,881.98 and the Shenzhen Component down 0.64% at 8,996.26.

Dalian Sunasia Tourism slid 8.41% in Shanghai, and Guangdong Songfa Ceramics declined 8.4%.

Hong Kong's Hang Seng Index followed suit, decreasing 0.35% to 16,244.58 points.

The losses in the special administrative region were led by Longfor Properties, Li Auto and BOC Hong Kong, with losses of 4.67%, 3.52%, and 3.13%, respectively.

In South Korea, the Kospi fell 0.6% to 2,525.05 points, as Hanjinkal lost 6.02% and Celltrion was off 3.95% by the end of trading.

Australia's S&P/ASX 200 index also experienced a slight decline, edging down 0.1% to 7,498.30 points.

The losses in Sydney were led by Mercury NZ and AMP, which registered losses of 3.68% and 3.57%, respectively.

New Zealand, on the other hand, managed a positive outcome, with the S&P/NZX 50 index gaining 0.47% to 11,858.31 points.

Scales Corporation was 3.4% firmer in Wellington, and Investore Property added 2.56%.

In currency markets, the dollar was last down 0.08% on the yen, trading at JPY 145.17.

The greenback also decreased 0.12% against the Aussie to AUD 1.4935, while it lost 0.16% on the Kiwi, changing hands at NZD 1.6019.

On the oil front, Brent crude futures were last up 3.71% on ICE at $80.28 per barrel, while the NYMEX quote for West Texas Intermediate was ahead 3.97% at $74.83.

Consumer prices decline less than expected in China

In economic news, China's consumer price index (CPI) showed a milder decline than expected in December, falling 0.3% inflation rate compared to November's 0.5% fall.

The figure also defied expectations, as a Reuters poll had projected a -0.4% reading.

On the other hand, China's producer price index (PPI), reflecting changes in manufacturers' prices, recorded a year-on-year decline of 2.7% in December, which was less severe than the 3% contraction experienced in November.

However, the trade front carried contrasting news, as China's exports exceeded expectations in December, though the year as a whole saw a decline.

According to customs data released on Friday, exports in December registered a year-on-year increase of 2.3% in dollar terms, surpassing the 1.7% growth pencilled in by a Reuters poll.

Meanwhile, imports in December rose by a modest 0.2% in dollar terms, slightly below the 0.3% increase anticipated by the same Reuters poll.

Despite the positive monthly export performance, the overall picture for 2023 remained challenging.

Over the course of the entire year, China's exports declined 4.6%, while imports experienced a more substantial drop of 5.5%.

Reporting by Josh White for Sharecast.com.