Asia report: Most markets fall as China confirms economic plans

Markets in the Asia-Pacific region closed mixed on Friday, with Chinese equities leading losses as Beijing's stimulus measures failed to meet investors' expectations.

It followed a high-profile meeting on Thursday where officials reaffirmed recent policy adjustments and promised additional measures to boost economic growth.

“Asian markets declined on Friday as some traders expressed frustration over the limited information from a Chinese economic conference, leading to a reduced risk appetite ahead of next week's Federal Reserve meeting,” said Patrick Munnelly at TickMill.

“The S&P 500 dropped by 0.5% as traders weighed higher-than-expected unemployment claims against stronger PPI data.

“Breaking a four-session winning streak, the Japanese stock market is notably down on Friday, reacting to the generally negative signals from Wall Street overnight.”

Munnelly noted that the Nikkei 225 dropped below the 39,500 level, with declines across most sectors, particularly among major players in technology and finance.

“Shares in China and Hong Kong also fell after the Central Economic Work Conference in China provided a readout that lacked specific policy details regarding fiscal stimulus, despite officials' commitments to boost consumption.

“However, their intention to reduce policy rates and bank reserve ratios resulted in Chinese 10-year government bonds falling below 1.8% for the first time ever.

“Investors will now have to wait until March for more clarity.”

Most markets finish the week in negative territory

In China, the Shanghai Composite dropped 2.01% to 3,391.88, and the Shenzhen Component fell 2.23% to 10,713.07.

Losses were steep among individual stocks, with JingDa Machine Ningbo plunging 10.02%, Anji Foodstuff down 9.99%, and Jiangsu Jiangnan High Polymer Fiber slipping 9.84%. Hong Kong's Hang Seng Index mirrored the negative sentiment, sliding 2.09% to 19,971.24.

Real estate and consumer goods were among the worst-performing sectors, with Longfor Properties falling 7.29%, China Resources Mixc Lifestyle losing 6.37%, and Budweiser Brewing Company shedding 6.05%.

In Japan, the Nikkei 225 and Topix both declined by 0.95%, closing at 39,470.44 and 2,746.56, respectively.

Heavy industry stocks weighed on Tokyo’s benchmark, with Omron Corporation down 5.63%, IHI Corporation off by 5.18%, and Mitsubishi Heavy Industries retreating 4.12%.

Australia also saw declines, with the S&P/ASX 200 slipping 0.41% to 8,296.00.

Infrastructure and capital management stocks underperformed, as Digico Infrastructure tumbled 9%, HMC Capital dropped 7.24%, and Contact Energy fell 4.91%.

On the other hand, South Korea and New Zealand offered a brighter picture.

The Kospi 100 rose 0.41% to 2,492.01, buoyed by strong performances in technology and specialty chemicals.

KakaoPay surged 10.4%, Kumyang gained 8.71%, and Kakao Corporation added 5.03%.

Meanwhile, New Zealand's S&P/NZX 50 climbed 0.48% to 12,754.26, led by Meridian Energy and Restaurant Brands New Zealand, both up 2.51%.

In currency markets, the dollar was last up 0.4% on the yen to trade at JPY 153.24, as it managed gains of 0.03% against the Aussie to AUD 1.57067, and advanced 0.12% on the Kiwi, changing hands at NZD 1.7353.

Oil prices edged higher, with Brent crude futures last up 0.11% on ICE at $73.49 per barrel, and the NYMEX quote for West Texas Intermediate gaining 0.17% to $70.14.

China outlines economic plans, business sentiment improves in Japan

On the news front, China outlined plans for significant economic measures following a high-level planning meeting led by president Xi Jinping.

The annual economic conference emphasised the need for proactive fiscal policy in 2025, including an increased deficit and the issuance of more ultra-long bonds, the state-run CCTV reported.

Additionally, the meeting affirmed a moderate loosening of monetary policy, such as potential interest rate cuts.

That approach echoed language from a politburo meeting earlier in the week, where “moderately loose” monetary policy was mentioned- a phrase last used during the 2008 global financial crisis.

In Japan, business sentiment among large manufacturers improved in the fourth quarter, according to the Bank of Japan’s Tankan survey.

The index for large manufacturers rose to 14 from 13 in the previous quarter, exceeding the median forecast of 12 from a Reuters poll.

Sentiment among large non-manufacturers remained robust, with the index slightly down to 33 from 34 but still surpassing expectations of 32.

Positive readings indicate that optimists outnumber pessimists, reflecting resilience in the economy despite global uncertainties.

Meanwhile, the Bank of Japan was reportedly leaning toward maintaining its current interest rates at its upcoming policy meeting, according to Reuters, citing sources familiar with its discussions.

Policymakers were opting to assess external risks and next year’s wage trends before making a decision.

While some board members believed conditions were ripe for a rate hike in December, others apparently preferred to delay action until January or March, when clearer wage data will become available.

Reporting by Josh White for Sharecast.com.