Asia report: Stocks mixed as investors digest infaltion data

Markets across the Asia-Pacific region closed mixed on Friday as investors assessed the latest consumer inflation figures from Japan.

Patrick Munnelly at TickMill Group said the region was a mixed bag on the back of negative sentiment from Wall Street, particularly from the Nasdaq, which had its second-worst day of the year amid tech earnings disappointment and rising yields.

“The Nikkei 225 also started the day with a slump but recovered slightly as participants digested somewhat ambiguous CPI data,” he said.

“The data mostly met expectations but showed a slight acceleration in both headline and core inflation.”

Meanwhile, the Hang Seng Index rose modestly and the Shanghai Composite remained flat.

“These indices were supported by further efforts from China to boost the economy.

“The NDRC released policies aimed at stimulating electronics products consumption and promoting automobile consumption, helping to maintain positive sentiment in the region.”

Stocks mixed amid fresh consumer, producer inflation data

Japan's benchmark Nikkei 225 declined by 0.57% to close at 32,304.25, while the broader Topix index marginally gained by 0.06% to 2,262.20.

Stocks in focus on Tokyo’s benchmark included Advantest Corporation, Tokyo Electron, and Dainippon Screen Manufacturing, which suffered significant losses of 5.79%, 5.62%, and 4.87% respectively.

In China, both the Shanghai Composite and the Shenzhen Component edged down by 0.06%, ending the day at 3,167.74 and 10,810.18 respectively.

Dalian Thermal Power was hit hard in Shanghai with an 8.11% fall, whereas Guangdong Rongtai Industry shed 4.86%.

In Hong Kong, the Hang Seng Index outperformed its regional peers, gaining 0.78% to close at 19,075.26, with Hang Seng Bank up by 4.07%, as Citic Pacific grew by 2.12%.

South Korea's Kospi also finished the day on a positive note, rising 0.37% to 2,609.76, with pharmaceuticals company Yuhan and Posco Holdings the star performers, with robust gains of 11.48% and 10.75% respectively.

Down under, Australia's S&P/ASX 200 slid slightly by 0.15% to end the day at 7,313.90.

Mineral Resources and Newcrest Mining were the major losers, falling by 7.48% and 5.28% respectively.

Meanwhile, New Zealand's S&P/NZX 50 inched up by 0.07% to 11,940.44, with Auckland Airport and Vital Healthcare among the gainers, with increases of 1.84% and 1.69% respectively.

On the currencies front, the dollar was last up 1.18% on the yen at JPY 141.72.

The greenback also appreciated against the Aussie and the Kiwi, as it rose 0.43% on the former to AUD 1.4814, and advanced 0.59% on the latter to NZD 1.6134.

In oil markets, Brent crude and West Texas Intermediate futures both registered gains, increasing by 0.69% to $80.16 per barrel on ICE, and by 0.7% to $76.18 per barrel on NYMEX, respectively.

Key economic indicators reflect diverging trends across Japan, Hong Kong, and South Korea

In economic news, Japan’s core consumer price index, which excludes fresh food prices, ascended 3.3% year-on-year, meeting economists' expectations as set in a Reuters survey.

It marked a marginal uptick from May's rate of 3.2%.

At the same time, the overall headline inflation rate also registered at 3.3% for June, slightly climbing from May's 3.2%.

The Bank of Japan will be mindful of stubborn inflationary pressure in food and goods, but retain its view that Japanese inflation is principally cost-push, reflecting the carryover effect of higher import costs,” said Duncan Wrigley at Pantheon Macroeconomics.

“Declining real wages and tame services inflation, even in the bubbly tourism sector, suggest that underlying inflation has yet to gain much traction.

“The BoJ is likely to leave policy settings on hold next Friday, and probably for the rest of the year.”

Meanwhile, Hong Kong reported a slowdown in its inflation rate for the second consecutive month.

The city's consumer price index rose 1.9% in June on the year, and according to the city's census and statistics department, the most substantial year-on-year price increases were found in the category of alcoholic beverages and tobacco, soaring 18.7%.

Prices for electricity, gas, and water experienced the second-highest increase, escalating by 13.3%.

In contrast, prices for durable goods declined by 3.7% during June.

On the other hand, South Korea revealed a drop in its producer price index (PPI) for June, as it slid by 0.2% on the year.

It was a reversal from May's 0.5% rise, and was the first negative shift since November 2020.

Reporting by Josh White for Sharecast.com.