Asia-Pacific Markets: China Shares Could Face More Pressure on Monetary Policy-Tightening Worries

The major Asia-Pacific stock indexes put in a mixed performance last week led the Nikkei’s first weekly loss in six on Brexit and virus worries, and declines in China and Hong Kong, which were fueled by rising Sino-U.S. tensions. Shares in Australia jumped on the strength of gold miners and South Korean stocks were boosted by strong export numbers.

In the cash market last week, Japan’s Nikkei 225 Index settled at 26652.52, down 98.72 or -0.37%. South Korea’s KOSPI Index finished at 2770.06, up 38.61 or +1.41% and Hong Kong’s Hang Seng Index closed at 26505.87, down 330.05 or -1.23%.

In China, the Shanghai Index settled at 3347.19, down 97.39 or -2.83% and Australia’s S&P/ASX 200 Index finished at 6642.60, up 8.50 or +0.13%.

Nikkei Posts First Weekly Loss in Six on Brexit, Virus Worries

Japan’s Nikkei share average fell on Friday to post its first weekly fall in six, as uncertainties over Brexit, U.S. stimulus and worries over surging COVID-19 cases at home sapped risk appetite.

Japanese Prime Minister Yoshihide Suga said on Friday the coronavirus situation in the country is tense, but added that he was not thinking of suspending the government travel subsidy program.

Denting sentiment further, British Prime Minister Boris Johnson said there was “a strong possibility” Britain and the European Union would fail to strike a trade deal.

Near-term U.S. fiscal stimulus appears unlikely after Democrat House Speaker Nancy Pelosi suggested wrangling over a spending package and coronavirus aid could drag on through Christmas.

Nikkei heavyweight SoftBank Group Posts Massive Gains

SoftBank Group Corp shares surged 11% after the investment conglomerate scored an $11.2 billion gain in the value of its stake in DoorDash Inc following the U.S. food delivery app’s blockbuster stock market debut.

SoftBank, which invested $680 million in DoorDash in the last three years, saw the value of its 25% stake in the company rise to $11.90 billion on the first day of trading in New York.

SoftBank’s shares climbed as much as 19% in Tokyo trading and closed at new two-decade highs at 8,306 yen.

SoftBank’s shares were also supported after Bloomberg News reported that the group was considering buying back shares to boost CEO Masayoshi Son’s stake so he could squeeze out remaining investors.

China Stocks Post Biggest Weekly Loss in 11 on Sino-US Tensions

China’s blue-chip stocks fell for a fifth straight session on Friday to post their biggest weekly loss in 11 weeks, as a flare-up in Sino-U.S. tensions and worries about policy tightening dented risk appetite.

S&P Dow Jones Indices on Thursday became the second major index provider to remove some Chinese companies from its index products following a Trump administration executive order, in the latest market disruption from persistent Sino-U.S. tensions.

In other sign of rising tensions, the U.S. Federal Communications Commission said on Thursday it had begun the process of revoking China Telecom’s authorization to operate in the United States.

South Korean Shares Post Sixth Weekly Jump

South Korean shares posted their longest streak of weekly gains since November 2019, as strong exports data and optimism over COVID-19 vaccines eclipsed concerns over a delay in U.S. stimulus and a third wave of infections at home.

South Korea’s exports during the first 10 days of December jumped 26.9% from a year earlier, official data showed, boosted by microchips and improving global demand.