Asia: Equities struggle for direction amid mixed Chinese data

Asian equity markets endured a mixed day on Thursday, as a batch of mixed economic data from China weighed on sentiment yet again.

The Shanghai Composite Index declined 0.48%, after a series of economic reports released after the close of the Asian session on Wednesday highlighted strong retail sales but disappointing industrial production.

Chinese retailers reported sales grew 11% year-on-year in October compared with a 10.9% advance in the previous month and analysts’ expectations for an unchanged reading.

Industrial production grew 5.6% year-on-year in October, slightly below the 5.7% reading registered in September and below the 5.8% gain analysts had forecast.

Meanwhile, Chinese money supply grew quicker than expected in October, expanding at a 13.5% year-on-year rate compared with the 13.2% reading analysts had expected, while new yuan loans were at 513.56bn, well below the 800bn forecast.

“The weaker-than-expected lending data just released are likely to add to doubts over the effectiveness of policy support,” said Julian Evans-Pritchard, China economist at Capital Economics.

“But our calculations suggest that credit growth is nonetheless continuing to accelerate.”

Hong Kong’s Hang Seng Index rose 2.40%, driven higher by a 2.3% gain in Chinese e-commerce firm Tencent Holdings.

Elsewhere, Japan’s Nikkei Stock Average edged 0.03% higher, while South Korea’s Kospi declined 0.20% and Australia’s S&P/ASX 200 rose 0.06%.

In Japan, core machinery orders rose 7.5% in September, bringing a three-month decline to an end, while South Korea’s central bank kept its monetary policy unchanged for the fifth consecutive month.

Analysts suggested Seoul policymakers are no longer under intense pressure to implement easing policies after the country recorded better-than-expected growth in the third quarter.

Shares in Australia reversed earlier losses after a decline in US oil prices had put pressure on the energy sector, with energy shares on the S&P/ASX 200 dropping over 3%.

On the currencies front, the yen lost 0.17% against the dollar, while the greenback lost 1.08% against its Australian counterpart, after data released earlier on Thursday showed unemployment in Australia declined from 6.2% in September to 5.9% last month.