HONG KONG (MarketWatch) — Asian stock markets gave up further ground on Friday, extending their losses for the week, after getting only a brief bump from data showing a pickup in China’s industrial production.
Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -1.40% ended 0.9% lower, to mark its lowest closing level since Oct. 16.
South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -1.48% finished 0.5% lower, and Australia’s S&P/ASX 200 index /zigman2/quotes/210598100/delayed AU:XJO -0.16% likewise closed with a 0.5% loss.
In China, Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -1.41% traded down 0.9%, bringing its loss for the week to 3.3%, while the Shanghai Composite Index /zigman2/quotes/206600939/delayed CN:000001 -1.11% fell 0.1%, marking its fifth straight losing session. The Shenzhen Composite Index ended 0.4% lower.
The broad regional tracking Asia Dow was off 0.4%
Markets in China and Hong Kong got a temporary lift from economic data releases, which pointed to the mainland economy stabilizing. But the effect proved fleeting.
Numbers released just after the Shanghai and Hong Kong market opens showed China’s consumer-price inflation cooled to a 33-month low in October, with the data likely to give policy makers scope for new rounds of easing measures.
Afternoon data from China were also positive, as industrial output showed an expectations-beating pickup, while retail sales and fixed-asset investment also came in slightly ahead of forecasts.
Wei Yao, economist at Societe Generale in Hong Kong, said the data exceeded general expectations and confirmed that activity is picking up in the current quarter. But Yao cautioned that China’s monetary-policy makers were likely wary of further easing moves.
“Given clear signs of growth recovery thanks to infrastructure pushes, the People’s Bank of China will probably stay on the sideline,” Yao said.
Xianfang Ren and Alistair Thornton at IHS Global Insights said the muted stock market reaction was due to an official having telegraphed the tone of the data ahead of the results.
“With the head of China’s statistics department noting that people would be ‘more confident’ in the state of the economy following the release of the October data, markets are unlikely to be surprised,” they said. Read: China posts upbeat data amid leadership change.
The economic news came as China’s ruling party is currently in the midst of a week-long conference to facilitate once-a-decade leadership changes. The IHS economists called Friday’s numbers “a lovely dataset to welcome in China’s new set of leaders.” Read: China’s leadership transition raises questions.
Reporting from 18th Party Congress
China's 18th Communist Party Congress is less glamorous than it looks, at least for reporters.
Meanwhile, U.S. stocks fell heavily for a second day Thursday, as sentiment took another hit from the prospect of the so-called fiscal cliff — more than $600 billion of tax hikes and spending cuts facing an ideologically divided U.S. government. Read: U.S. stocks drop on Europe, fiscal cliff