Asia report: Stocks mostly weaker as prices rise in China

Markets in Asia closed mostly in the red on Friday, as fresh data out of China showed consumer and producer inflation rising in March.

In Japan, the Nikkei 225 managed gains of 0.2% to 29,768.06, as the yen weakened 0.35% against the dollar to last trade at JPY 109.64.

Automation specialist Fanuc was up 0.38%, while among the benchmark’s other major components, fashion firm Fast Retailing was down 3.4% and technology conglomerate SoftBank Group lost 0.5%.

The broader Topix index was 0.39% firmer by the end of trading in Tokyo, settling at 1,959.47.

On the mainland, the Shanghai Composite was down 0.92% at 3,450.68, and the smaller, technology-heavy Shenzhen Composite fell 0.95% to 2,236.58.

Official data out of Beijing showed both consumer and producer inflation on the rise in China, with the consumer price index adding 0.4% year-on-year in March.

The producer price index, meanwhile, was ahead 4.4% when compared to the same month in 2020.

Both readings were ahead of expectations set by a Reuters poll of analysts, which were for a 0.3% rise in the consumer price index and a 3.5% increase in the producer price index.

IG senior market analyst Joshua Mahony said inflation remained a key concern for market participants, with the data out of China doing little to allay fears that overheating could cause a withdrawal in accommodative measures.

“A jump in both consumer and producer price index readings did little to help Chinese stocks overnight, yet commentary from Jerome Powell did help allay fears that a rise in prices would spark any drastic action from the Fed,” Mahony said.

“Instead, Powell provided a supportive assessment of future policy, with the average inflation targeting strategy allowing the Fed to remain accommodative in the face of rising prices.”

South Korea’s Kospi slipped 0.36% to 3,131.88, while the Hang Seng Index in Hong Kong lost 1.07% to 28,968.80.

Linklogis, a financial technology company supported by Chinese internet behemoth Tencent, rocketed 9.9% on its debut day in the special administrative region.

Tencent itself eked out gains of 0.08% by the end of the day.

Seoul’s blue-chip technology stocks were weaker, with Samsung Electronics and SK Hynix losing 1.3% and 2.78%, respectively.

Oil prices were lower as the region entered the weekend, with Brent crude last down 0.48% at $62.90 per barrel, and West Texas Intermediate off 0.2% at $59.48.

In Australia, the S&P/ASX 200 was 0.05% weaker at 6,995.20, while across the Tasman Sea, New Zealand’s S&P/NZX 50 was behind 0.46% at 12,574.35.

The down under dollars were both weaker against the greenback, with the Aussie last off 0.5% at AUD 1.3131, and the Kiwi retreating 0.36% to NZD 1.4215.