Asia report: Markets fall as investors watch Biden-Xi meeting

Hong Kong stocks led declines in the Asia-Pacific region on Thursday, influenced by a dip in electric vehicle stocks, particularly Xpeng.

Investors were also closely following high-level discussions between the United States and China on the sidelines of an intergovernmental conference in San Francisco.

Patrick Munnelly at TickMill Group said equities in Asia were influenced by choppy overnight trading in the US and a waning of recent data-driven momentum.

“The Nikkei 225, despite better-than-expected exports and machinery orders, saw a decline as investors opted to book profits,” he noted, adding that the Hang Seng and Shanghai Composite dipped as well.

“These declines were attributed to mixed tech earnings and the aftermath of the Biden-Xi meeting.

“The rhetoric from the meeting was described as constructive and productive, with both leaders agreeing to restart cooperation on counter-narcotics and establish forums for military-to-military contact.”

However, reports also noted that US president Joe Biden referred to his Chinese counterpart Xi Jinping “as a dictator”, Munnelly said, and raised concerns about China’s human rights abuses in Xinjiang, Tibet, and Hong Kong.

“Biden emphasised that the US would take action to prevent its technology from being used to undermine its security.

“The nuanced outcomes of the Biden-Xi meeting, coupled with tech earnings and global economic considerations, contributed to the mixed performance in the Asia-Pacific markets.”

Stocks in the red across the Asia-Pacific region

In Japan, the Nikkei 225 index slipped by 0.28% to close at 33,424.41, while the Topix index fell by 0.19% to 2,368.62.

Leading the declines on Tokyo’s benchmark were Sapporo Holdings, down 4.37%; Yokogawa Electric, off 3.74%; and Citizen Holdings, which lost 3.53%.

In China, the Shanghai Composite index dipped by 0.71% to 3,050.93, and the Shenzhen Component declined by 1.23% to 9,954.40.

Companies like Danhua Chemical Technology and Hunan Copote Science Technology led the losses in Shanghai, falling 4.57% and 4.48%, respectively.

Hong Kong’s Hang Seng Index experienced a 1.36% decrease, closing at 17,832.82.

Notable declines were seen in Xiaomi, down 6.55%; CSPC Pharmaceutical Group, off 5.97%; and WuXi Biologics, which was 5.82% weaker.

South Korea’s Kospi managed a slight gain of 0.06%, closing at 2,488.18, led higher by Doosan Bobcat and Kia, which were ahead by 3.92% and 3.68%, respectively.

In Australia, the S&P/ASX 200 index declined by 0.67% to 7,058.40, with AMP plunging 15.76% and Life360 falling 6.98% by the end of trading in Sydney.

New Zealand’s S&P/NZX 50 index dropped 1.07% to 11,230.87, with Infratil leading the losses with a 4.06% fall, followed by Stride Property’s 3.07% slide.

In currency markets, the dollar was last down 0.13% on the yen, trading at JPY 151.17.

Meanwhile, the greenback was more robust against its downunder counterparts, adding 0.23% on the Aussie to reach AUD 1.5399, while it advanced 0.47% against the Kiwi to change hands at NZD 1.6680.

On the oil front, Brent crude futures were last down 0.32% on ICE at $80.92 per barrel, while the NYMEX quote for West Texas Intermediate decreased 0.39% to $76.36.

Australian job growth tops forecasts, Biden and Xi meet

In economic news, Australia recorded robust job growth in October, exceeding expectations.

A fresh government survey showed net employment increasing by 55,000 jobs last month, surpassing the Reuters forecast of just 20,000 additions.

While the Australian labour market demonstrated resilience, the unemployment rate also increased to 3.7% in October, matching expectations and slightly higher than the 3.6% recorded in September.

Meanwhile, in a significant development on the international front, the United States and China have agreed to resume high-level military communication.

The decision was reached during a face-to-face meeting between US president Joe Biden and Chinese president Xi Jinping, marking their first in-person encounter in a year.

Following the talks, Biden emphasised the importance of “direct, open, clear communications” between the two nations.

The US had been keen on revitalising military communication channels, particularly after several near-miss incidents involving Chinese vessels and American forces.

Biden underscored the need to manage competition and avoid conflicts, stating, “We have to ensure that competition does not veer into conflict”.

He also stressed the necessity of joint efforts to address critical global challenges, including climate change, counternarcotics, and artificial intelligence.

The summit between the US and China took place on the sidelines of the Asia-Pacific Economic Cooperation (APEC) conference in San Francisco.

Reporting by Josh White for Sharecast.com.