Asia report: Markets mixed as investors digest China data

In Japan, the Nikkei 225 was up 1.11% at 23,671.13, as the yen eked out gains of 0.05% against the dollar to last trade at JPY 105.35.

Fashion firm Fast Retailing was down 0.14%, while among the benchmark’s other major components, automation specialist Fanuc was up 2.71%, and technology conglomerate SoftBank Group rose 3.15%.

The broader Topix index added 1.25% by the end of trading in Tokyo, closing at 1,637.98.

Exports from Japan were down 4.9% year-on-year in September, according to data released by the Ministry of Finance during the session.

On the mainland, the Shanghai Composite was off 0.71% at 3,312.67, and the smaller, technology-heavy Shenzhen Composite was 0.7% weaker at 2,249.53.

In fresh economic data out of China, the country’s third-quarter gross domestic product managed gains of 4.9% year-on-year, which was just shy of the 5.2% improvement expected by domestic economists, according to Wind Information.

Retail sales, meanwhile, were 3.3% higher in September when compared to the same month last year.

“The Chinese economy finally appears to be gaining traction, after months of sub-par consumer spending,” said CMC Markets chief market analyst Michael Hewson.

“Last week’s September trade numbers finally showed some evidence that internal demand was starting to pick up after several months of lacklustre activity, as imports rose 13.2% to their best levels this year.

“This outperformance raised expectations that retail sales in September would finally start to show signs of life after months of weak readings.”

Hewson said the performance of the Chinese consumer had not been the same since the country came out of lockdown at the end of February, though optimism in the summer started to improve as a result of positive data from the auto sector, with reports from the likes of Daimler, as well as Apple talking of some decent rebounds in their Chinese markets.

“Despite this optimism, retail sales in China only struggled back into positive territory in last month’s August numbers when we saw a rise of 0.5%, a pretty pathetic number when you consider China came out of lockdown in March.

“Today’s September reading has taken the recovery story a step further with the second positive reading this year, with a rise of 3.3%, well above expectations of 1.5%.”

That still remained well below the 8% gain seen at the end of last year, Michael Hewson noted, and was still 7.2% lower year-to-date, but it did appear to show that the Chinese economy was starting to approach escape velocity.

“Manufacturing has also been doing much better relative to the Chinese consumer, rebounding to its best level in almost a decade in July in the various official and private sector PMI’s.

“Industrial production also continued its recent outperformance returning a steady 6.9%, a decent increase from 5.6% in August, and the best level since the end of last year.”

South Korea’s Kospi was ahead 0.22% at 2,346.74, while the Hang Seng Index in Hong Kong was 0.64% firmer at 24,542.26.

The blue-chip technology stocks were both stronger in Seoul, with Samsung Electronics up 0.84% and chipmaker SK Hynix was ahead 1.64%.

Trade and internet giant Alibaba Group was 1.09% higher by the end of trading in Hong Kong, as associated financial technology company Ant Group was granted approval for its expected listing in the special administrative region from the China Securities Regulatory Commission.

Sun Art Retail Group, meanwhile, rocketed 19.17% after Alibaba confirmed it was buying a controlling interest in the company.

Oil prices were lower at the end of the Asian day, with Brent crude last down 0.58% at $42.69 per barrel, and West Texas Intermediate losing 0.51% to $40.67.

In Australia, the S&P/ASX 200 rose 0.85% by end-of-play in Sydney, settling at 6,229.40.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 lost 0.39% to 12,385.25, as the electricity generator-retailers continued to slide.

Contact Energy was down 2.33%, Genesis Energy lost 2.19%, and Mercury NZ was 1.85% weaker.

Trading was quiet, however, suggesting that traders in Wellington were relatively unmoved by Jacinda Ardern’s victory in Saturday’s general election.

The prime minister led the centre-left Labour Party to win a majority of seats in the country’s House of Representatives - an almost unheard-of feat, given New Zealand’s use of a system of proportional representation.

Ardern has led the country’s government for the last three years in coalition with two minor parties, being the Greens and the nationalist NZ First group, the latter of which lost enough support on Saturday to see them out of parliament.

The down under dollars were stronger against the greenback, with the Aussie last ahead 0.38% at AUD 1.4066, and the Kiwi advancing 0.51% to NZD 1.5063.