Stock Exchange :

Asia markets mixed as China’s October industrial production data misses forecasts

Key Points
  • Stocks in Asia traded mixed in the morning.
  • Chinese industrial production data for October missed forecasts, growing 4.7% year-on-year, Reuters reported citing official data. That compared against expectations of a 5.4% growth from a Reuters poll.
  • U.S. and China are at a reported impasse as they seek to finalize a limited trade agreement amid a tariff war that has lasted for more than a year.
  • U.S. Federal Reserve Chairman Jerome Powell said Wednesday the path of the central bank's interest rates is unlikely to change as long as the economy keeps growing.

Stocks in Asia were mixed in Thursday morning trade, while China's October industrial production data showed  it missed expectations.

Mainland Chinese shares nudged higher in early trade, with the Shenzhen component adding 0.14% and the Shenzhen composite also advancing 0.177%. The Shanghai composite was largely flat.

Chinese industrial production data for October grew 4.7% year-on-year, Reuters reported citing official data. That compared against expectations of a 5.4% growth from a Reuters poll.

Hong Kong's Hang Seng index slipped 0.4%, as shares of Chinese tech juggernaut Tencent dropped around 2% after the heavyweight announced on Wednesday a 13% year-on-year drop in profit.

Elsewhere, Japan's Nikkei 225 slipped 0.17% as shares of Familymart dropped more than 2%. The Topix index, on the other hand, traded 0.46% lower. South Korea's Kospi added 0.2%.

Shares of Z Holdings, previously named Yahoo Japan, skyrocketed more than 16% after the firm said Thursday it was in discussions to merge with Line. Shareholder Softbank Group also saw its stock gain about 1%.

Japan's economic growth touched a 1-year low in the third quarter, Reuters reported Thursday citing government data. GDP grew 0.2% on an annualized rate in the third quarter, well lower than a median market forecast of a 0.8% rise.

Shares in Australia edged higher, with the S&P/ASX 200 up about 0.6%. Shares of major miner BHP, however, slipped 0.22% after the company announced that CEO Andrew Mackenzie will retire at the end of 2019.

Australia's unemployment rate released on Thursday showed it edged up to 5.3%, an increase from a dip in September. Net new jobs was down 19,000 in October — the largest decline since late 2016, according to Reuters.

Overall, the MSCI Asia ex-Japan index was 0.18% lower.

US-China trade

Developments in U.S.-China trade continue to be monitored, with a reported impasse being hit between the two economic powerhouses as they seek to finalize a limited trade agreement amid a tariff war that has lasted for more than a year.

"I think we're … heading to a stage where there could be big moves in markets," Rob Subbaraman, head of global macro research at Nomura, told CNBC's "Squawk Box" on Thursday.

Subbaraman said the trade negotiations are "getting very interesting" amid the recent developments on disagreements between Beijing and China. This comes as the December 15 deadline — when additional tariffs by the U.S. on Chinese exports are set to kick in — approaches, he said.

"I think markets which were quite hopeful around a deal have pulled back a little bit and they're getting back into maybe, more neutral territory," Subbaraman said.

Overnight stateside, the Dow Jones Industrial Average touched another all-time high as it closed 92.10 points higher at 27,783.59. The S&P 500 also went higher to its 20th record closing high at 3,094.04. The Nasdaq Composite, however, closed just below the flatline at 8,482.10.

Fed watch

Fed Chair Powell addressed the Congressional Joint Economic Committee on Wednesday. In prepared remarks, Powell said the path of the central bank's interest rates is unlikely to change as long as the economy keeps growing.

"We see the current stance of monetary policy as likely to remain appropriate as long as incoming information about the economy remains broadly consistent with our outlook of moderate economic growth, a strong labor market, and inflation near our symmetric 2 percent objective," he said in the prepared testimony.

Still, he warned that challenges such as low inflation and weakness overseas linger. Powell's testimony comes after the Fed's third rate cut for the year in October.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 98.367 after seeing highs above 98.4 yesterday.

The Japanese yen, often seen as a safe-haven currency in times of market uncertainty, traded at 108.79 against the dollar after strengthening from levels above 108.9 in the previous session. The Australian dollar changed hands at $0.6801 after seeing an earlier high of $0.6841 yesterday.

Oil prices rose in the morning of Asian trading hours. The international benchmark Brent crude futures contract added 0.67% to $62.79 per barrel. U.S. crude futures gained 0.81% to $57.58 per barrel.

source: CNBC

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