Asia report: Region joins sell-off, Korean growth beats forecasts

Asia-Pacific markets saw a widespread sell-off on Thursday, with several indices posting significant losses and Australia’s main board reaching 12-month lows.

However, amidst the negative sentiment, mainland China stocks stood out by ending the day positively.

“Asian stocks experienced a decline, reaching 11-month lows, while US futures also dropped,” said Patrick Munnelly, market analyst at TickMill.

“The surge in the dollar and rising Treasury yields contributed to the downturn amidst concerns that US interest rates will remain high.

“The MSCI’s broadest index of Asia-Pacific shares outside Japan fell by 1.5%, and Japan’s Nikkei saw a 2% decline, with chip-related shares leading a broad sell-off.”

Munnelly noted that after-hours trading saw Alphabet’s shares drop 2%, pushing Nasdaq futures down by 1.49%.

“In China, earlier gains stemming from news that China would issue CNY 1trn in sovereign debt quickly diminished, leading to a reversal of fortunes in mainland and Hong Kong indexes.”

Bourses in the red except for mainland China

In Japan, the Nikkei 225 index fell by 2.14% to close at 30,601.78, while the Topix index declined by 1.34% to reach 2,224.25.

Leading the losses on Tokyo’s benchmark were Advantest, down 6.87%; Dainippon Screen Manufacturing, off 5.61%; and Tokyo Electron, which fell 5.03%.

Contrary to the regional trend, mainland China’s markets saw gains, with the Shanghai Composite rising by 0.48% to settle at 2,988.30 and the Shenzhen Component increasing by 0.4% to reach 9,566.10.

Notable gainers in Shanghai included Fujian Furi Electronics, up 10.05%, and Anhui Jianghuai Auto, which closed 10% firmer.

Hong Kong’s Hang Seng Index experienced a modest decline of 0.24%, closing at 17,044.61, with key decliners including Li Ning Co, which tumbled 20.7%, as well as ANTA Sports Products and MTR, which lost 5.34% and 4.36%, respectively.

The Kospi index in South Korea saw a substantial drop of 2.71%, ending the day at 2,299.08, with prominent losers including Samsung Electro-Mechanics, down 13.22%, and HYBE, 10.72% weaker by the close.

Australia’s S&P/ASX 200 index fell 0.61% to 6,812.30, as Megaport slid 16.33% and Block lost 8.02%.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 declined 0.33% to settle at 10,848.54, led lower by a 6.21% fall for Freightways and a 5.8% decline for Argosy Property.

In currency markets, the dollar was last 0.11% stronger on the yen, trading at JPY 150.40, as it advanced 0.05% on the Aussie to AUD 1.5859 and eked out gains of 0.01% against the Kiwi to change hands at NZD 1.7237.

Oil prices experienced a slight decline, with Brent crude futures last down 0.4% on ICE at $89.77 per barrel and the NYMEX quote for West Texas Intermediate falling 0.61% to $84.87.

Economic growth tops forecasts in South Korea

In economic news, the South Korean economy showed resilience as it surpassed expectations in the third quarter, according to data from the Bank of Korea.

Gross domestic product (GDP) was up 0.6% from July to September, outstripping the median forecast of 0.5%, according to a Reuters survey.

The better-than-expected performance was particularly in focus ahead of the upcoming policy meeting of the Bank of Korea in late November.

Reporting by Josh White for Sharecast.com.