Asia report: Markets mixed as China misses on Q2 GDP

Asia-Pacific bourses were mixed at the end of trading on Friday, after China’s latest economic growth data missed expectations.

In Japan, the Nikkei 225 was up 0.54% at 26,788.47, as the yen strengthened 0.2% against the dollar to last trade at JPY 138.68.

Fashion firm Fast Retailing, which operates the international Uniqlo brand, rocketed 8.7% after it reported a record quarterly profit overnight.

It was a mixed day for the benchmark’s other major components, with automation specialist Fanuc up 0.14%, while technology conglomerate SoftBank Group lost 1.65%.

The broader Topix index was 0.03% weaker by the end of the session in Tokyo, settling at 1,892.50.

On the mainland, the Shanghai Composite was down 1.64% at 3,228.06, and the technology-centric Shenzhen Component was 1.52% lower at 12,411.01.

China’s economy grew less than expected in the second quarter, with fresh data showing a 0.4% expansion in GDP, missing the 1% improvement pencilled in by analysts in a Reuters poll.

It was also down significantly from the 4.8% rise in GDP in the first three months of the year.

Retail sales surprised to the upside, however, rising 3.1% year-on-year in June, after Reuters polling pitched no change.

“Zero-Covid is the key culprit for the quarterly [GDP] weakness, shutting down a swathe of manufacturing for half the quarter, and scything down much of the service sector,” said Pantheon Macroeconomics chief China economist Craig Botham.

“The monthly data at least points to a rebound underway, which should see activity spring back in the third quarter.

“But the property drag is only getting worse, and without more aggressive policy support we think the third quarter rebound will prove short-lived.”

Botham noted that Covid cases were also edging higher again, raising the risk of renewed lockdowns.

“Reaching the 5.5% growth target looks increasingly implausible.”

South Korea’s Kospi was ahead 0.37% at 2,330.98, while the Hang Seng Index in Hong Kong tumbled 2.19% to 20,297.72.

Internet conglomerate Alibaba Group fell 5.98% in the special administrative region, after a Wall Street Journal report claimed its executives had been called to answer questions over the theft of police data.

Alibaba’s peers were also weaker in Hong Kong, with Meituan down 1.81% and Tencent Holdings sliding 2.99%.

Chinese banking and property plays were also in the spotlight, after the South China Morning Post reported that a mortgage payment boycott on unfinished properties was growing.

The SCMP said buyers of more than 230 properties in 86 cities were now refusing to make payments on their mortgages, leading to a 3.9% fall for China Overseas Land & Investment and a 6.2% slide for Longfor Group.

Seoul’s blue-chip technology stocks rocketed ahead, meanwhile, with Samsung Electronics up 4.35% and SK Hynix 5% firmer.

Oil prices were higher as the region entered the weekend, with Brent crude last up 1.91% on ICE at $100.99 per barrel, and West Texas Intermediate ahead 1.67% at $97.38 on NYMEX.

In Australia, the S&P/ASX 200 slipped 0.68% to 6,605.60, while across the Tasman Sea, New Zealand’s S&P/NZX 50 was off 0.58% at 11,122.61.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.09% at AUD 1.4806, and the Kiwi advancing 0.21% to NZD 1.6293.

Reporting by Josh White at Sharecast.com.