Asia report: Most markets slip as South Korea avoids recession

Asia-Pacific markets were mostly in decline on Thursday, following Wall Street’s continued slide overnight, after the Dow Jones Industrial Average recorded its worst performance in over a month.

Concerns over US economic conditions weighed on investor sentiment across the region, although one brighter spot was South Korea’s avoidance of a technical recession in its latest GDP figures.

“Asian stocks fell on Thursday, the dollar stayed close to three-month highs, and US rates increased as market anxiety persisted due to the outcome of the US election,” said Patrick Munnelly at TickMill.

“Higher US Treasury rates, the uncertainty surrounding the election, and mounting anticipation of a more cautious Federal Reserve easing tempo all combined to limit risk sentiment.

“Market anxiety is exacerbated by growing expectations of Donald Trump's potential return to the White House.”

Munnelly noted that the Nikkei recovered from previous losses to manage small gains by the close.

“Declines in Chinese equities put pressure on MSCI's broadest index of Asia-Pacific stocks outside of Japan, which fell 0.3%.

“The Hang Seng index in Hong Kong lost 1.3%, while the blue chips in China slid 0.5%.”

Most regional markets follow Wall Street lower

In Japan, the Nikkei 225 inched up 0.1% to 38,143.29, while the broader Topix index dipped slightly by 0.05% to 2,635.57.

Major gainers on Tokyo’s benchmark included Konica Minolta, which rose 5.23%, and Nidec Corporation, up 5%.

Mainland Chinese markets saw sharper declines, with the Shanghai Composite falling 0.68% to 3,280.26 and the Shenzhen Component dropping 1.27% to 10,441.75.

Leading the losses were Guizhou Guihang Automotive Components, down 10.01%, and Shanghai Huitong Energy, which fell 9.99%.

Hong Kong’s Hang Seng Index also struggled, shedding 1.3% to 20,489.62.

Notable declines included Zhongsheng Group, which plummeted 7.26%, and Chow Tai Fook Jewellery Group, down 5.73%.

South Korea’s Kospi 100 dropped 0.96% to 2,586.64 despite the country narrowly avoiding a technical recession.

Third-quarter GDP grew by just 0.1%, missing expectations of 0.5%.

LG Innotek led the losses with a sharp 11.87% fall, followed by declines in Samsung Fire & Marine Insurance and Hyundai Motor.

Australia’s S&P/ASX 200 slipped 0.12% to 8,206.30, with substantial losses from Reece, Wisetech Global, and Newmont Corporation, each falling over 6%.

Meanwhile, New Zealand’s S&P/NZX 50 bucked the regional trend, gaining 0.21% to 12,814.07, led by Tourism Holdings and Skellerup Holdings.

Currency markets saw the Japanese yen strengthen slightly, with the dollar last down 0.49% to trade at JPY 152.01.

The greenback was meanwhile off 0.3% against the Aussie at AUD 1.5029, while it retreated 0.34% against the Kiwi, changing hands at NZD 1.6596.

Oil prices climbed, with Brent crude futures last up 1.67% on ICE to $76.21 per barrel, and the NYMEX quote for West Texas Intermediate advancing 1.74% to $72.00.

South Korean economy narrowly avoids technical recession

On the data front, South Korea's economy narrowly avoided a technical recession in the third quarter, with GDP expanding by just 0.1% from the prior quarter.

The slight growth followed a 0.2% contraction in the second quarter, preventing a back-to-back decline that would have signalled a recession.

However, the third-quarter figure fell short of expectations, with economists surveyed by Reuters anticipating growth of 0.5%.

On an annual basis, the economy grew 1.5%, which also missed forecasts of 2% growth.

Reporting by Josh White for Sharecast.com.