Asia: Stocks decline as FOMC interest rate decision looms

Asian stocks outside of Japan declined as oil prices dragged and investors exercised caution ahead of the Federal Reserve’s interest rate decision next week.

Hong Kong’s Hang Seng closed down 1.11% and the Shanghai composite fell 0.59% while Japan’s Nikkei 225 rose 0.96%.

Brent crude dropped 1.19% to $39.27 per barrel and West Texas Intermediate decreased 0.96% to $36.41 per barrel at 1024 GMT.

“We expect a little pop back above $40 on bargain hunting today, but there’s currently no end in sight for the wider downtrends in Brent and WTI,” said Michael Van Dulken and Augustin Eden at Accendo Markets.

Van Dulken added that equities were in the red on what is likely to be a “risk-off Friday” before China retail sales and industrial product ion data on Sunday, and the Fed rate decision on 16 December. The Fed is widely expected to raise interest rates for the first time in nearly a decade.

In Friday’s economic data, Chinese banks issued 708.9 billion yuan ($110.10bn) of new yuan loans in November compared with 513.6 trn yuan in October, the People’s Bank of China revealed.

The figure surpassed analysts’ expectations of 600 bn yuan.

Total social financing came in at 1.02 trn yuan, up from 476.7 bn yuan the previous month, while M2 money supply – a broader measure that covers cash in circulation and demand deposits – was 13.7% higher than a year earlier, beating expectations for a 13.4% increase.

Meanwhile, reports the chairman of China’s biggest non-state-owned conglomerate has disappeared rattled markets in Hong Kong and China.

Fosun Group confirmed it had temporarily suspended trading of shares in Fosun International after its co-founder and chairman, Guo Guangchang, has been out of contact, Chinese media reported on Thursday.

The 48-year-old is known as China's Warren Buffet.

Five of Fosun’s listed companies in mainland China, including Shanghai Fosun Pharmaceutical and Shanghai Ganglian E-Commerce Holdings stopped trading in Shanghai and Shenzhen stock exchanges.

The group’s Hong Kong-listed firms, Fosun International and Shanghai Fosun Pharmaceutical (Group) Co., also suspended trading Friday, according to company statements.

In Japan, Prime Minister Shinzo Abe was due to begin his state visit to India on Friday after the New Delhi government approved a $14.7 billion Japanese proposal to build India's first bullet train line.

In company news, Kawasaki Heavy Industries, Hitachi Transport and Nippon Sharyo rallied in Japan.

Miners Fortescue and Atlas Iron were up and unchanged respectively as iron ore prices remained near a decade low.

BC Iron declined after the miner temporarily suspended production in its Nullagine joint venture due to negative market conditions.

Glencore rallied in Hong Kong after the miner said it will further cut its debt and gave an upbeat earnings forecast.

Nissan gained on news that its French partner Renault made headway in eleventh-hour talks to resolve a power struggle of French government influence at the carmaker.