Stocks in Asia were mixed on Thursday, while China’s October industrial production data showed it missed expectations.
Mainland Chinese shares gained on the day, with the Shenzhen component adding 0.61% to 9,746.56 and the Shenzhen composite also advancing 0.609% to approximately 1,624.13. The Shanghai composite rose 0.16% to about 2,909.87.
Chinese industrial production data for October grew 4.7% year-on-year, Reuters reported citing official data. That compared against expectations of a 5.4% growth from a Reuters poll.
“Given external headwinds and the limited impact of policy stimulus, we expect GDP growth to slow further in Q4 and into 2020,” economists at Oxford Economics wrote in a note.
Acknowledging the “positive vibes” surrounding the potential “phase one” deal between China and the U.S., the economists nevertheless said: “We remain sceptical as to how sustainable the recent truce is and do not expect the bulk of tariffs to be removed soon, given the gulf in perceptions on what both sides have ‘given’ and obtained so far in the negotiations.”
Hong Kong’s Hang Seng index slipped 1.14%, as of its final hour of trading. Shares of Chinese tech juggernaut Tencent dropped 2.44% after the heavyweight announced on Wednesday a 13% year-on-year drop in profit.
Elsewhere, Japan’s Nikkei 225 slipped 0.76% on the day to 23,141.55 as shares of Familymart dropped 2.74%. The Topix index also slipped 0.94% lower to 1,684.40.
Japan’s economic growth touched a 1-year low in the third quarter, Reuters reported Thursday citing government data. GDP grew 0.2% on an annualized rate in the third quarter, well lower than a median market forecast of a 0.8% rise.
Shares of Z Holdings — previously named Yahoo Japan — skyrocketed 16.93% after the firm said Thursday it was in discussions to merge with Line, which also saw its stock surge 15.38%.
South Korea’s Kospi closed 0.39% higher at 2,130.77, with shares of Line parent company Naver jumping 13.61%.
Shares in Australia edged higher, with the S&P/ASX 200 gaining 0.55% on the day to 6,735.10. Australia’s unemployment rate released on Thursday showed it edged up to 5.3%, an increase from a dip in September. Net new jobs was down 19,000 in October — the largest decline since late 2016, according to Reuters.
Overall, the MSCI Asia ex-Japan index was 0.43% lower.
US-China trade
Developments in U.S.-China trade continue to be monitored, with a reported impasse being hit between the two economic powerhouses as they seek to finalize a limited trade agreement amid a tariff war that has lasted for more than a year.
“I think we’re … heading to a stage where there could be big moves in markets,” Rob Subbaraman, head of global macro research at Nomura, told CNBC’s “Squawk Box” on Thursday.
Subbaraman said the trade negotiations are “getting very interesting” amid the recent developments on disagreements between Beijing and China. This comes as the December 15 deadline — when additional tariffs by the U.S. on Chinese exports are set to kick in — approaches, he said.
“I think markets which were quite hopeful around a deal have pulled back a little bit and they’re getting back into maybe, more neutral territory,” Subbaraman said.
Fed watch
Fed Chair Powell addressed the Congressional Joint Economic Committee on Wednesday. In prepared remarks, Powell said the path of the central bank’s interest rates is unlikely to change as long as the economy keeps growing.
“We see the current stance of monetary policy as likely to remain appropriate as long as incoming information about the economy remains broadly consistent with our outlook of moderate economic growth, a strong labor market, and inflation near our symmetric 2 percent objective,” he said in the prepared testimony.
Still, he warned that challenges such as low inflation and weakness overseas linger. Powell’s testimony comes after the Fed’s third rate cut for the year in October.
Currencies and oil
The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 98.399 after seeing an earlier low of 98.321.
The Japanese yen, often seen as a safe-haven currency in times of market uncertainty, traded at 108.68 against the dollar after strengthening from levels above 108.9 in the previous session. The Australian dollar changed hands at $0.6795 after seeing an earlier high of $0.6841.
Oil prices rose in the afternoon of Asian trading hours. The international benchmark Brent crude futures contract added 0.61% to $62.75 per barrel. U.S. crude futures gained 0.68% to $57.51 per barrel.
