Asia report: Markets mostly lower ahead of US inflation reading

Stock markets in Asia were mostly lower as they closed on Friday, with investors putting their wallets away ahead of some much-anticipated inflation data out of the United States later in the global day.

In Japan, the Nikkei 225 was down 1% at 28,437.77, as the yen weakened 0.21% against the dollar to last trade at JPY 113.73.

It was a negative day for the benchmark’s major components, with automation specialist Fanuc down 0.08%, fashion firm Fast Retailing losing 0.92%, and technology conglomerate SoftBank Group 0.59% weaker.

The broader Topix index was off 0.77% by the end of trading in Tokyo, closing at 1,975.48.

On the mainland, the Shanghai Composite slipped 0.18% to 3,666.35, and the smaller, technology-heavy Shenzhen Composite was ahead 0.14% at 2,546.65.

The property sector’s health was in focus in China, after the floundering Evergrande was officially labelled as in default by Fitch Ratings overnight.

“The mood in Asian session was sourish, as Evergrande has officially been labelled as a defaulter,” said Swissquote senior analyst Ipek Ozkardeskaya.

“The news came as no shocker and the losses in the Asian session were moderate.

“Investors expect the People’s Bank of China to take all precautions to avoid a broader shockwave to other sectors.”

Ozkardeskaya said a monetary boost from the People’s Bank would be “soothing news”, given the Fed would not be bearing Christmas gifts at its meeting next week.

“The expectation is the announcement of a faster quantitative easing taper to tame the rising inflation.

“But how fast the US will get the QE program done will depend on how bad the inflation got.”

South Korea’s Kospi lost 0.64% to 3,010.23, while the Hang Seng Index in Hong Kong dropped 1.07% to 23,995.72.

The blue-chip technology stocks were weaker in Seoul, with Samsung Electronics down 1.66% and SK Hynix sliding 2.43%.

Investor attention was very much turning across the Pacific by the end of the Asian day, with the US Labor Department set to release its consumer price index for November later in the day.

Some analysts were predicting the highest year-on-year rise in consumer inflation since 1982, with market participants eyeing the numbers for hints as to the Federal Reserve’s next move.

Oil prices moved lower for most of the Asian session, but were bouncing back as the region entered the weekend, with Brent crude last up 0.35% at $74.68 per barrel, and West Texas Intermediate rising 0.51% to $71.30.

In Australia, the S&P/ASX 200 settled 0.42% weaker at 7,353.50, as the energy subindex was 1.49% lower on the back of earlier falling oil prices.

Among the energy plays on Sydney’s bourse, Oil Search was down 2.42%, Santos lost 2.11% and Woodside Petroleum was behind by 0.72%.

Elsewhere, Fortescue Metals said its chief executive officer Elizabeth Gaines would step down as soon as a successor was found, as the iron ore extractor looked to pivot to focusing on resources and renewable energy.

Its shares were 0.82% weaker by the end of trading in the sunburnt country.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was 0.61% firmer at 12,849.68, with acquisitions hogging the limelight in Wellington.

Tourist vehicle operator THL leapt 5.96% after it announced it was buying its Sydney-traded competitor Apollo Tourism & Leisure in an all-share deal worth NZD 144m.

Pharmaceuticals firm Ebos, meanwhile, rose 5.48% after returning from a trading halt, having raised NZD 647m to buy medical device company LifeHealthcare.

The company was paying AUD 1.2bn in cash and AUD 23m in shares for the Sydney-based firm, which operates across New Zealand, Australia and parts of Asia.

It was a mixed picture for the down under dollars against the greenback, with the Aussie last trading 0.04% stronger at AUD 1.3988, while the Kiwi weakened 0.38% to change hands at NZD 1.4771.