Asian Shares Finish Mostly Higher; Profit-Taking Hits Shanghai Index

Asia Pacific shares finished mostly higher on Friday with investors in China booking profits ahead of the weekend, while others remained skeptical about any progress being made in the lingering trade dispute between the United States and China despite the scheduling of the resumption of negotiations for next Thursday.

Helping to boost the major indexes earlier in the session were positive comments from China early Thursday. A spokesperson from China suggested that the economic powerhouse would not retaliate against the latest round of tariffs from Washington for now and would prefer negotiating under “calm” conditions.

At 08:19 GMT, Japan’s Nikkei 225 Index settled at 20704.37, up 243.44, or 1.19%. Hong Kong’s Hang Seng Index is trading 25724.73, up 21.23 or +0.08% and South Korea’s KOSPI Index finished at 1967.79, up 34.38 or +1.78%.

China’s Shanghai Index settled at 2886.24, down 4.68 or -0.16% and Australia’s S&P/ASX 200 Index closed at 6604.20, up 96.80 or +1.49%.

Hong Kong Turmoil

Hong Kong’s Hang Seng Index gave back all of its earlier gains to finish lower after democracy activist Joshua Wong was arrested Friday, ahead of another week of mass protests that has gripped the city for the last three months. His arrest came as the Civil Human Rights Front (CHRF) confirmed that the planned protests for Saturday will be canceled in view of a police ban.

On Thursday, China sent a fresh batch of troops into Hong Kong. The military said it is a routine rotation and its Hong Kong Garrison will “resolutely follow” the central government’s instructions, as well as “resolutely implement the ‘one country, two systems’ principle.”

South Korea: Holds Rates Steady…Cut Expected in October

The Bank of Korea left its benchmark interest rate unchanged on Friday, a decision that was in line with expectations of analysts surveyed by Reuters. The central bank had cut its base rate for the first time in three years in July. However, it is widely expected to ease at the next meeting on October 17 to support a slowing economy.

Japan Economic Data Mixed

For Japan, it was a “good news, bad news” situation. On a positive note, the Unemployment Rate fell to 2.2%, Preliminary Industrial Production rose 1.3% and Housing Starts fell less-than-expected. Negative news included, a drop in Tokyo Core CPI and weaker than expected Retail Sales

Australia Reports Dismal Building Permits Data

In Australia, building permits fell by 9.7% month-on-month in July versus an expected reading of 0.0%. This followed a 1.2% decline in June.

The annualized reading came in at 28.5%, having dropped by 25.6% in the preceding month. Meanwhile, the annualized private sector credit growth moderated to 3.1% in July after having risen by 3.3% in June.

The news confirms a weakening economy and that the recent consecutive rate cuts by the Reserve Bank of Australia (RBA) have not hit the building industry yet.