By Ese Erheriene
Asian equity markets were mixed Monday, with Japan’s Nikkei outperforming regional markets following stronger-than-expected economic data and a weaker yen.
The Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK +0.40% closed up 1.7% at 17,672.62, becoming the region’s biggest outperformer. In other markets, Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -0.53% ended down 0.5%, Singapore’s FTSE Straits Times Index /zigman2/quotes/210597985/delayed SG:STI -0.06% was off 0.9%, and Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +0.28% was last down 1.4%
Government data in Japan showed that its third-quarter gross domestic product expanded an annualized 2.2% in the three months ended September, beating expectations of a 0.9% expansion, as forecast by economists polled by The Wall Street Journal.
Monday’s data also marked the third straight quarter of expansion in Japan, after a patchy economic performance in the three years since the summer of 2013.
Japan’s economy will likely continue its gradual recovery, said economy minister Nobuteru Ishihara in a statement on Monday, citing “improvements in employment and wage conditions.”
The latest growth figures also showed that residential construction rose in the country, after borrowing rates fell. Lower rates have fueled demand for property investments. Among individual real estate companies, Mitsui Fudosan /zigman2/quotes/205394574/delayed JP:8801 +1.88% rose 4.2%, Mitsubishi Estate /zigman2/quotes/208910776/delayed JP:8802 +0.70% added 1.9%, and Sumitomo Realty & Development /zigman2/quotes/206628792/delayed JP:8830 +0.39% climbed 4.1%.
Meanwhile, the yen /zigman2/quotes/210561789/realtime/sampled USDJPY -0.2168% fell against the dollar, and was recently down 0.8%, making it cheaper for exporters to ship their goods around the world. Export-oriented stocks surged, with Mazda Motor /zigman2/quotes/204777714/delayed JP:7261 -1.94% ending up 5.7% and Toshiba /zigman2/quotes/205628942/delayed JP:6502 +2.28% adding 2.2%.
Elsewhere in the region, markets were under pressure as investors clung to an optimistic view that U.S. President-elect Donald Trump might be able to stimulate growth in the U.S. economy, following the election last week.
This could see U.S. interest rates rise at a faster pace next year, triggering outflows from emerging market equities, said Mixo Das, Southeast Asia Equity Strategist at Nomura.
“Much of the pain was felt on Friday, and we’re just drifting slightly lower,” said Das. “I think we’ll continue to see choppy trading.”
Australia's pearl industry struggles to shine
Australia is the last place on earth where pearls are cultured in wild oysters. But South Sea pearl farmers are struggling to keep their luxury industry alive, as China swamps world markets with cheaply produced freshwater pearls.
In the foreign-exchange market, Asian currencies continued their post-U.S. election selloff. In addition to the yen, the Indonesian rupiah /zigman2/quotes/210562008/realtime/sampled USDIDR -0.0709% and the Indian rupee /zigman2/quotes/210561405/realtime/sampled INRUSD -0.1402% sank against the U.S. dollar , with investors betting the dollar could continue to strengthen following Trump’s unexpected victory. Indonesia’s stock market /zigman2/quotes/210597981/delayed ID:JAKIDX +0.41% was down another 1.6% Monday, adding to Friday’s 4.0% plunge. India’s stock market is closed for a public holiday.
A selloff continued among Hong Kong property developers given the concerns of a faster interest rate increase in the U.S., a move that will hurt the city’s real-estate market. The city’s currency peg to the U.S. dollar means that local monetary policies move in lockstep to adjustments in the U.S.
The Hang Seng Property subindex was last off 1.9%. Among key developers, Wharf Holdings /zigman2/quotes/202854264/delayed HK:4 0.00% fell 2.1%, while Sun Hung Kai Properties /zigman2/quotes/209086152/delayed HK:16 +0.48% fell 2%.
In mainland China, stock markets opened down but quickly began to rally after a strong showing last week led to equities entering a technical bull market.
A slew of data released Monday also supported a view that the world’s second-largest economy is stabilizing, with industrial output growth stabilizing, fixed-asset investment growth lightly accelerating, while retail sales slowed, according to official data. The Shanghai Composite Index /zigman2/quotes/210598127/delayed CN:SHCOMP +1.14% closed up 0.5%, while the Shenzhen Composite Index /zigman2/quotes/210598015/delayed CN:399106 +0.34% added 0.3%.
Looking ahead, the market will remain focused on the U.S. Federal Reserve meeting in December, with interest rates likely to rise, say analysts. According to CME Group’s Fedwatch tool, the probability of an increase in December has risen to 81.1% from 71.5% previously.
“The market is now focusing on...the rate hike planned for December [by the Federal Reserve],” said Alex Wijaya, a senior sales trader at CMC Markets, in a note.