Asia report: Most markets fall, Australian inflation slows

Asia-Pacific markets largely declined on Wednesday as investors evaluated Australia’s latest inflation data, showing consumer prices at their lowest levels since early 2021.

The region's losses contrasted with gains in the US, where Wall Street’s Nasdaq Composite reached a record high on the strength of tech stocks.

“Asia shares declined on Wednesday due to weakness in China, as investors brace for a closely contested US election that could have significant implications for the world's second-largest economy, even as Beijing tries to boost growth,” said Patrick Munnelly at TickMill.

“Gold reached a record high as concerns over the tight U.S. presidential race supported the yellow metal, while bitcoin also approached a new peak as markets weighed the prospect of a victory by Republican candidate Donald Trump.

“MSCI's broad Asia-Pacific index outside Japan fell, tracking a decline in Chinese assets.”

Munnelly noted that both mainland China and Hong Kong stocks were in the red.

“China's latest stimulus package seems modest, with 60% dedicated to easing local government debt.

“Supporting the real estate industry is receiving more attention, but there is still little urgency surrounding more general structural problems like debt, deflation, and demographics.

“Though global investors remain extremely wary of any tariff threats in the event of a Republican sweep in next week's US elections, equity support may provide some boost to domestic confidence.”

Japan the outlier on a weak day for the Asia-Pacific region

In Japan, the Nikkei 225 climbed 0.96% to close at 39,277.39, while the Topix gained 0.81% to 2,703.72.

Tokyo’s benchmark was lifted by Tokyo Gas, which surged 8.71%, alongside Fujikura and Kansai Electric Power Co.

In contrast, China’s Shanghai Composite dropped 0.61% to 3,266.24, and the Shenzhen Component edged down 0.12% to 10,530.85, with Xi’an Bright Laser Tech plunging 12.84%, leading losses on the mainland.

Hong Kong’s Hang Seng Index suffered a 1.55% decline, closing at 20,380.64, weighed down by Hansoh Pharmaceutical Group, which fell 10.51%, along with SMIC and WuXi Biologics.

South Korea’s Kospi 100 dropped 1.01% to 2,601.39, impacted by sharp declines in Korea Zinc, which plummeted nearly 30%, and other notable losses including Kumyang and LG Household & Healthcare.

Australia’s S&P/ASX 200 slid 0.83% to 8,180.40, with Woolworths Group leading losses, down 6.1%, followed by Liontown Resources and Clarity Pharmaceuticals.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 dropped 0.69% to 12,694.84, driven by declines in KMD Brands, Stride Property, and Tourism Holdings.

In currency markets, the dollar was last down 0.12% on the yen, trading at JPY 153.17, while it lost 0.26% against the Aussie to AUD 1.5203, and retreated 0.29% from the Kiwi, changing hands at NZD 1.6692.

Oil prices edged higher, with Brent crude futures last up 0.7% on ICE at $71.62 per barrel, while the NYMEX quote for West Texas Intermediate rose 0.76% to $67.72.

Australian inflation slows to within the RBA’s target range

In economic news, Australia’s inflation rate slowed sharply in the third quarter, reaching its lowest level since early 2021 as falling electricity and gasoline prices helped curb price pressures.

Data from the Australian Bureau of Statistics showed annual inflation easing to 2.8%, down from 3.8% in the prior quarter, aligning with the Reserve Bank of Australia’s target range of 2% to 3%.

That was just below economists’ expectations of 2.9%.

The trimmed mean inflation, which strips out the most volatile price movements, also showed signs of easing, dropping to 3.5% from 4% in the prior quarter.

Reporting by Josh White for Sharecast.com.