Asia report: Most markets rise, but Chinese stocks sink

Asia-Pacific markets saw mostly positive movement on Friday, buoyed by Wall Street's overnight gains, although Chinese equities faced significant losses.

Investors digested Japan’s latest inflation figures, which showed cooling consumer prices.

“Stocks in China and Hong Kong fell on Friday as investors continued to express caution owing to the potential of tariffs from US president-elect Donald Trump,” said Patrick Munnelly at TickMill.

“Chinese government advisers are recommending that Beijing should maintain an economic growth target of around 5.0% for next year, pushing for stronger fiscal stimulus to mitigate the impact of expected US tariff hikes on the country's exports, according to sources.

“Disappointing corporate results also contributed to the losses.”

Munnelly added that chipmakers led equities slightly higher across the rest of Asia, after Nvidia reached a record high in US trade on strong earnings.

“Assets associated with Adani Group companies remained under pressure, with dollar bonds suffering losses after US prosecutors indicted chairman Gautam Adani for fraud.

“Core inflation in Japan stayed above the central bank's 2% target in October, according to data, which kept pressure on the central bank to raise interest rates.

“There is a 57% chance that the Bank of Japan will raise interest rates by 25 basis points in December, according to market pricing.”

Most markets rise; mainland China a notable exception

Japan's Nikkei 225 rose 0.68% to close at 38,283.85, while the broader Topix gained 0.51% to 2,696.53.

Core inflation, which excludes fresh food, rose slightly above expectations but was cooler than the previous month, with overall CPI also easing month-on-month.

Credit Saison surged 6.24%, leading gains on Tokyo’s benchmark, followed by Mitsui Chemicals, up 5.14%, and Resonac Holdings, which gained 4.66%.

Mainland Chinese markets struggled, with the Shanghai Composite plummeting 3.06% to 3,267.19 and the Shenzhen Component losing 3.52% to 10,438.72.

Heavy losses in key stocks like DLG Exhibitions & Events, down 9.97%, and Huali Industries, off 9.94%, dragged Shanghai lower.

The Hang Seng Index in Hong Kong also declined, falling 1.89% to 19,229.97.

Technology and insurance sectors underperformed, with Baidu tumbling 8.59%, China Life Insurance dropping 7.07%, and SMIC shedding 6.7%.

South Korea's Kospi 100 added 0.99% to reach 2,511.64, supported by gains in major companies.

SK Square led the charge with an 8.83% jump, followed by SKC, up 8.28%, and Hanwha Techwin, which added 6.45%.

Australia’s S&P/ASX 200 climbed 0.85% to 8,393.80, driven by A2 Milk Company, which soared 13.31% after the dual-listed New Zealand dairy exporter upgraded revenue guidance.

Paladin Energy and Yancoal Australia also performed well, rising 5.94% and 5.4%, respectively.

In New Zealand, the S&P/NZX 50 rallied 2.17% to 13,041.90, with A2 Milk Company posting an 18.01% gain, while Eroad rose 6.67% and Fisher & Paykel Healthcare added 4.3%.

On the currency front, the dollar was last 0.08% weaker on the yen, trading at JPY 154.42, while it gained 0.13% against the Aussie to AUD 1.5378, and advanced 0.32% on the Kiwi, changing hands at NZD 1.7120.

Oil prices were slightly lower, with Brent crude futures last down 0.05% on ICE at $74.19 per barrel, and the NYMEX quote for West Texas Intermediate off 0.11% at $70.02.

Inflation cools in Japan amid reports of looming government stimulus

In economic news, Japan’s inflation cooled in October, with the headline rate slipping to 2.3%, its lowest level since January and down from 2.5% in September.

Core inflation, which excludes fresh food prices, matched the headline figure at 2.3%, slightly above economists’ expectations of 2.2%.

The ‘core-core’ inflation rate, which removes both fresh food and energy, rose to 2.3% from 2.1% in September, signalling persistent price pressures in some areas.

The Bank of Japan, which monitors the core-core metric closely, said it remained committed to fostering a “virtuous cycle between wages and prices”, suggesting continued support for its easy monetary policy stance.

Amid the inflationary trends, the Japanese government was reportedly preparing a stimulus package worth JPY 13.9trn from its general account to counter rising costs for households.

Including private and local government spending, the total package was expected to reach JPY 39trn.

In Singapore, the economy grew at a robust 5.4% year-on-year in the third quarter, exceeding both an earlier estimate of 4.1% and a 4.6% forecast from economists polled by Reuters.

It marked the city-state’s strongest quarterly growth since late 2021.

Quarter-on-quarter, Singapore’s economy expanded by 3.2%, up from 0.5% in the prior quarter.

The government raised its full-year growth projection to “around 3.5%”.

Reporting by Josh White for Sharecast.com.