Asia: Equities waver as Chinese markets gain and Aussie dollar surges

Asian equity markets were mixed on Wednesday, as Chinese stocks gained but failed to generate any momentum across the region.

The Shanghai Composite Index rallied 2.33%, while Hong Kong’s Hang Seng Index climbed 0.44%, as Chinese investors pinned their hopes on the prospect of more economic stimulus.

Data released on Tuesday showed China’s official reading on factory activity declined for the fourth consecutive month in November, fuelling expectations Beijing policymakers could cut interest rates of banks’ reserve requirement ratios.

“The tepid PMI prints from China suggest that growth momentum in the fourth quarter is likely to remain weak,” Barclays’ analysts said in a note.

The property sector was again the main driver in both Hong Kong and mainland China, with China Vanke, the country’s largest property developer, gaining 4.1% in Hong Kong, while sector peer Poly Real Estate Group hit its 10% daily up limit in Shanghai for the second consecutive day.

Elsewhere, Japan’s Nikkei Stock Average declined 0.37%, while South Korea’s Kospi and Australia’s S&P/ASX 200 slid 0.72% and 0.15% respectively.

The latter was dragged lower by energy stocks, which were jittery amid concerns ongoing concerns over the oil markets, ahead of a two-day OPEC meeting scheduled to kick off on Thursday in Vienna.

Materials-linked equities also struggled, even though copper prices rose to a one-week high late on Tuesday after Chinese producers unveiled supply cuts for next year.

On the macroeconomic front, the Australian Bureau of Statistics said gross domestic product in the third quarter advanced 2.5% year-on-year and 0.9% from the previous three months, in line with analysts’ expectations.

“Australian GDP helped the week’s standout FX performer, with the economy growing better than most expected despite the ongoing Chinese slowdown and commodity crash,” said IG’s market analyst Joshua Mahony.

“However, the worry is that domestic consumption continues to lag, and instead it was the resurgence of exports which helped drive growth.”

The positive figures sent the Australian dollar surging, as it reached the highest level against its US counterpart since 15 October and, as of 1127 GMT, it was up 0.14% against the greenback, while the yen fell 0.17% against the dollar.