Asia report: Markets mixed as Trump rally fades

(Sharecast News) - Markets in the Asia-Pacific region closed in a mixed state on Friday, after a weak session on Wall Street overnight as investors digested signals from the US Federal Reserve. Investors were weighing economic data from China and Japan, alongside a notable drop in US equities following Fed chair Jerome Powell's comments indicating no immediate rate cuts.

"Asian markets concluded a volatile week on a more stable note, aided by Chinese consumers lifting retail sales above expectations as a slew of governmental support measures buoyed the stock market," said Patrick Munnelly at TickMill.

"Property sales increased slightly, but they are still down 15.8% from a year earlier.

"A decrease in property investment deepened, and home prices plummeted the most in nine years, which was hardly the rebound investors hoped for."

Munnelly noted that globally, the bullish backdrop for share markets was fading as investors, who revelled in Donald Trump's US presidential election victory last week, became increasingly concerned about the scope for US policy easing in the coming year.

"Short-term Treasury yields rose following Federal Reserve chair Jerome Powell's comments that there is no need to hasten interest rate cuts, as the market reduced bets on a December cut to 59% from 82% midweek.

"Fed fund futures for next year fell by 8 ticks in December, predicting only 71 basis points of easing by the end of 2025, fewer than three standard-sized cuts.

"This is one reason why Wall Street and European stock futures are in the red."

Markets mixed after red session on Wall Street overnight

In Japan, the Nikkei 225 rose 0.28% to 38,642.91, and the Topix edged 0.39% higher to 2,711.64.

The benchmark index in Tokyo was supported by strong gains in financial and industrial stocks like Japan Steel Works, which surged 7.12%.

Lacklustre data from China dragged on mainland markets, after retail sales for October exceeded expectations, while industrial production and investment disappointed.

The Shanghai Composite was down 1.45% at 3,330.73, and the Shenzhen Component lost 2.62% to 10,748.97.

Those losses in Shanghai were led by Shanghai Highly Group, Xiamen Solex High-Tech Industries, and Datang Telecom Technology, which were all down around 10%.

Hong Kong's Hang Seng Index in Hong Kong was flat, slipping 0.05% to 19,426.34, with declines in major stocks like Alibaba Health Information Technology, down 5.94%, and Geely Automobile Holdings, which lost 5.18%.

South Korea's Kospi 100 outperformed, rising 1.05% to 2,419.20, buoyed by a 7.21% jump in Samsung Electronics.

The tech giant's preliminary agreement with its workers' union over wage increases and bonuses, reported on Friday, helped to bolster confidence.

Australia's S&P/ASX 200 also saw gains, rising 0.74% to 8,285.20, as mining and financial stocks led the charge.

Capricorn Metals was up 5.04% and Insignia Financial added 4.78% in Sydney trading.

Conversely, New Zealand's S&P/NZX 50 dipped 0.06% to 12,684.88, weighed down by steep losses in Pacific Edge, which fell 14.29%.

In currency markets, the dollar was last down 0.62% on the yen to trade at JPY 155.30, as it lost 0.22% against the Aussie to AUD 1.5460, and retreated 0.35% from the Kiwi, changing hands at NZD 1.7034.

Oil prices declined further, with Brent crude futures last down 1.35% on ICE at $71.58 per barrel, and the NYMEX quote for West Texas Intermediate off 1.4% at $67.74.

Japanese economy shows signs of recovery, China data dump comes in mixed

On the data front, Japan's economy showed signs of recovery in the third quarter, with real GDP expanding 0.3% year-on-year, ending two consecutive quarters of contraction.

That marked a reversal from the revised 1.1% decline in the prior quarter.

Quarter-on-quarter growth matched expectations at 0.2%, while the annualised expansion of 0.9% slightly outpaced estimates of 0.7%.

However, the annualised figure represented a significant slowdown from the 2.9% growth recorded in the prior quarter, underscoring lingering challenges in Japan's economic recovery.

In China, retail sales provided a positive surprise, growing 4.8% year-on-year in October, surpassing the 3.8% forecast and improving from September's 3.2% growth.

However, other economic indicators fell short of expectations.

Industrial production rose 5.3% compared to the same period last year, missing the projected 5.6% increase.

Meanwhile, investment data highlighted ongoing struggles in the real estate sector.

On a brighter note, urban unemployment edged down to 5% from 5.1% in September, offering some relief amid broader economic uncertainties.

Reporting by Josh White for Sharecast.com.