Asia Pacific Shares Mixed: Violence Pressures Hang Seng, Weak Data Drives Shanghai, Nikkei Lower, Aussie Stocks Rise on Rate Cut Hopes

Protests in Hong Kong drove the Hang Seng Index down 4.79% last week with a violent turn Monday. China’s industrial output grew significantly slower than expected in October. The Nikkei was pressured by a report that showed growth in Japan’s economy ground to a near standstill in the third quarter. Shares in Australia were unpinned last week after disappointing October jobs data raised the chances of another rate cut by the Reserve Bank of Australia (RBA) in the coming months.
James Hyerczyk
Shanghai stock exchange

The major Asia Pacific stock indexes finished mixed the week-ending November 15 with shares rising in South Korea and Australia, but losing ground in Hong Kong, Japan and China. U.S.-China trade relations dominated the news, but the price action was also influenced by escalating violence in Hong Kong and weak economic data in the region.

Last week, in Japan, the Nikkei 225 Index settled at 23303.32, down 88.55 or -0.38%. Hong Kong’s Hang Seng Index closed at 26326.66, down 1324.48 or -4.79% and China’s Shanghai Index finished at 2891.34, down 72.84 or -2.46%.

South Korea’s KOSPI Index settled at 2162.18, up 24.95 or +1.17% and Australia’s S&P/ASX 200 Index finished at 6793.70, up 69.60 or +1.04%.

Hong Kong Violence Escalates

Protests in Hong Kong drove the Hang Seng Index down 4.79% last week with a violent turn Monday, heightening an already volatile situation days after a group of pro-democracy lawmakers was arrested in the city.

In one incident, a Hong Kong protester is in critical condition after being shot by police. In an unrelated incident, police said “rioters” poured “flammable liquid” on a man and set him on fire.

The latest mass demonstrations come after three pro-democracy lawmakers were arrested on November 9 and reports indicated that other were warned they soon could be taken into custody.

Japan’s Economy Grinds to Near Standstill

The Nikkei was pressured by a report that showed growth in Japan’s economy ground to a near standstill in the third quarter, at its weakest in a year, as the U.S.-China trade war and soft global demand knocked exports and kept pressure on policymakers to ramp up stimulus in order to bolster a fragile recovery, according to the Japan Times.

Private consumption also cooled from the previous quarter, casting doubt on the Bank of Japan’s view that robust domestic demand will offset the impact from intensifying global risks.

In the third quarter the world’s third-largest economy grew an annualized 0.2 percent, slowing sharply from a revised 1.8 percent expansion in April to June, according to preliminary gross domestic product data released by the government Thursday.

It fell well short of a median market forecast for a 0.8 percent gain, and marked the weakest growth since a 2.0 percent contradiction in the July-September period last year.

China’s Economy Weakens as October Indicators Miss Forecasts

China’s industrial output grew significantly slower than expected in October, as weakness in global and domestic demand and the drawn-out Sino-U.S. trade war weighed on activity in the world’s largest economy.

Industrial production rose 4.7% year-on-year in October, data from the National Bureau of Statistics released on November 14 showed, below the median forecast of 5.4% growth in a Reuters poll.

Indicators showed other sectors also slowing significantly and missing forecasts with retail sales growth back near a 16-year trough and fixed asset investment growth the weakest on record.

Other data showed China’s property investment growth in the first 10-months of 2019 slowing year-on-year. Fixed asset investment, a key driver of economic growth, grew 5.2% from January-October, against expected growth of 5.4%. The January-October growth was the lowest since Reuters records began in 1996.

Private sector fixed-asset investment, which accounts for 60% of the country’s total investment, grew 4.4% in January-October. Retail sales rose 7.2% year-on-year in October, missing expected growth of 7.9% and matching the more than 16 year low hit in April.

Aussie Shares Rise

Shares in Australia were unpinned last week after disappointing October jobs data raised the chances of another rate cut by the Reserve Bank of Australia (RBA) in the coming months. The surprise report caused the Australian Dollar to fall 0.6 percent, while the Australian 10-year bond dipped 9 basis points to 1.179 percent.

The fall in yields pushed investors into bond proxies and high-growth stocks, with technology companies among the market’s best performers.

Australian shares were pulled higher throughout the week while the major U.S. stock indexes hovered near record highs. The gold mining sector also provided some support as investors sought the safe-haven allure of the precious metal amid uncertainty about a Sino-U.S. trade resolution.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US