Asia report: Stocks mostly lower as producer prices fall in China

Stocks in Asia were mostly weaker at the close on Wednesday, after producer prices in China fell and as investors watched the results roll in from the US midterm elections.

In Japan, the Nikkei 225 was down 0.56% at 27,716.43, as the yen traded flat against the dollar at JPY 145.68,

Fashion firm Fast Retailing was down 2.47%, while automation specialist Fanuc was up 0.17% and technology conglomerate SoftBank Group added 1.3%.

Video game giant Nintendo tumbled 7.1% after it slashed its sales projections for the Switch console by 9.5%, having already slid 19.2% on an annual basis.

The broader Topix index was off 0.41% by the end of trading in Tokyo, settling at 1,949.49.

On the mainland, the Shanghai Composite lost 0.53% at 3,048.17, and the technology-heavy Shenzhen Component was 0.79% weaker at 11,055.29.

Fresh data out of Beijing showed China’s producer price index falling 1.3% year-on-year in October, which was ahead of expectations for a 1.5% decline, but was a swing from the 0.9% rise in September.

It was the first decline in producer prices since December 2020.

“We expect producer prices to continue to trend lower, owing to the impact of overcapacity in materials sectors,” said Duncan Wrigley at Pantheon Macroeconomics.

“Stimulus is driving infrastructure and manufacturing capacity investment, but this provides only a partial offset to the still weak demand from property construction.

“The drop in manufacturing PPI is likely to lead to slowing export price rises, enabling China to assist in the fight against global inflation.”

Consumer prices, meanwhile, were up 2.1% on the year in October, slowing from the 2.8% inflation print in September.

South Korea’s Kospi gained 1.06% to 2,424.41, while the Hang Seng Index in Hong Kong slid 1.2% to 16,358.52.

Chinese technology plays were under pressure in the special administrative region, as investors weighed the likelihood of further scrutiny on the sector in the wake of the US elections.

Alibaba Group was down 1.64%, Meituan lost 3.02%, Tencent slid 3.66%, and Xiaomi slipped 0.79%.

The property sector was in the green, meanwhile, after the Financial Market Institutional Investors regulator in Beijing said it would expand its private enterprise credit programme.

CIFI Holdings was up 28.57%, Country Garden added 13.89%, Logan Group jumped 19.05%, and Longfor Group rose 4.05%.

Hong Kong’s primary airline Cathay Pacific descended 0.52% after it announced that chief customer and commercial officer Ronald Lam would replace chief executive Augustus Tang in the new year.

In economic news from South Korea, the country’s seasonally-adjusted unemployment rate was unchanged in October at 2.8%, as 677,000 jobs were added compared to the same time last year.

The blue-chip technology stocks were on the front foot in Korea, with Samsung Electronics up 0.32% and SK Hynix 1.71% higher.

Oil prices were lower at the end of the Asian day, with Brent crude futures last down 0.52% on ICE at $94.86 per barrel, and West Texas Intermediate 0.6% weaker on NYMEX at $88.38.

In Australia, the S&P/ASX 200 gained 0.58% to 6,999.30, while across the Tasman Sea, New Zealand’s S&P/NZX 50 slipped 0.07% to 11,143.48.

Both of the down under dollars were weaker against the greenback, with the Aussie last off 0.57% at AUD 1.5456, and the Kiwi retreating 0.89% to NZD 1.6941.

Reporting by Josh White for Sharecast.com.