Asian Shares Follow Wall Street Lower

Asian stocks fell broadly on Tuesday, although Chinese stocks rose notably after reports that China and the United States have resumed high levels talks to reduce tensions ahead of Trump-Xi meeting later this month.

The benchmark Shanghai Composite index climbed 0.93 percent to 2,654.88 while Hong Kong’s Hang Seng index rose 0.62 percent to 25,792.87.

Chinese Premier Li Keqiang today said the country needs reforms and adjustments in policies to lift growth. “Despite the downward pressure, we will not resort to massive stimulus,” Li said

Japanese shares tumbled, dragged down by technology stocks after one of Apple’s suppliers, Lumentum, slashed its fiscal outlook for the current quarter.

The Nikkei average ended the session down 2.06 percent at 21,810.52 after hitting as low as 21,484.65 – its weakest since Oct.30 – earlier in the session. The broader Topix index closed 2 percent lower at 1,638.45.

Advantest lost 3.2 percent, Screen Holdings shed 5.6 percent, TDK Corp retreated 6.3 percent and Japan Display plunged 9.5 percent. Exporters Canon, Panasonic, Honda Motor, Toyota and Sony fell 1-3 percent.

Toshiba Corp jumped 4.1 percent after announcing that it would continue its share buyback program until next November. SoftBank advanced 1.9 percent on fund raising reports.

Australian stocks fell sharply, with selling seen across the board. The benchmark S&P/ASX 200 index tumbled 1.80 percent to finish at 5,834.20 while the broader All Ordinaries index ended down 1.74 percent at 5,922.60.

Lender Westpac lost 5.4 percent on going ex-dividend while the other three big banks fell between 1.2 percent and 1.5 percent. Insurer Suncorp Group dropped 2 percent after it postponed the targeted close of the A$725 million sale of its Australian life insurance business to Japan’s Dai-ichi Life.

Mining heavyweights BHP Billiton and Rio Tinto declined 1.7 percent and 2.5 percent, respectively after an overnight drop in base metals and iron ore prices. In the healthcare sector, CSL, Resmed and Cochlear gave up 3-4 percent.

Woodside Petroleum, Santos, Origin Energy and Oil Search fell 2-3 percent after crude oil prices fell for the eleventh straight session overnight, giving up earlier gains after U.S. President Donald Trump tweeted against production cuts.

Fertilizer maker Incitec Pivot plummeted 5.2 percent after its full-year profit fell almost 35 percent due to large first-half impairment against its explosives services business. Agribusiness Ruralco Holdings soared 7.2 percent on reporting a 12 percent increase in full-year profit.

Seoul markets fell modestly as foreign investors offloaded large-cap shares. The benchmark Kospi dropped 9.21 points or 0.44 percent to close at 2,071.23. Tech heavyweight Samsung Electronics fell 1.6 percent to snap a four-day winning streak while LG Electronics shed 1.4 percent and SK Hynix declined 3.5 percent.

New Zealand shares joined a global selloff, with the benchmark S&P/NZX 50 index ending down 95.33 points or 1.06 percent at 8,861.52. Ryman Healthcare slumped 4.4 percent and A2 Milk lost 2.3 percent.

U.S. stocks fell for a third day on Monday as Apple suppliers cut their forecasts and Goldman Sachs shares hit a two-year low on concerns over a scandal surrounding the plundering of a Malaysian government investment fund.

The Dow Jones Industrial Average slumped 2.3 percent, the tech-heavy Nasdaq Composite plunged 2.8 percent and the S&P 500 plummeted 2 percent.

Asian Shares Recover Early Losses To End Mixed

Asian stocks turned in a mixed performance on Monday as global growth worries persisted and investors awaited key economic indicators from China due Wednesday for directional cues.

Chinese markets posted strong gains after the China Securities Regulatory Commission rolled out a series of measures over the weekend to support the private sector.

The benchmark Shanghai Composite index surged 31.65 points or 1.22 percent to 2,630.52 while Hong Kong’s Hang Seng index closed 0.12 percent higher at 25,633.18.

Japanese shares ended little changed amid lack of fresh catalysts after the U.S. midterm elections. The Nikkei average finished marginally higher at 22,269.88, while the broader Topix index closed a tad lower at 1,671.95.

Tech shares underperformed, with Advantest losing 5.5 percent and TDK Corp declining 4 percent. Defensive stocks such as Tokyo Gas and East Japan Railway rose around 1 percent.

Sony tumbled 3.1 percent and Panasonic declined 1.6 percent despite a modestly softer yen. Real estate developer Mitsui Fudosan jumped 3.5 percent after raising its net profit forecast for the year ending March 2019.

Australian markets ended mostly higher, with energy stocks leading the surge after oil prices rose over 1 percent in Asian trade on the back of news that Saudi Arabia would reduce crude sales in December.

The benchmark S&P/ASX 200 rose by 19.50 points or 0.33 percent to 5,941.30, a three-week high, while the broader All Ordinaries index ended up 16.20 points or 0.27 percent at 6,027.20.

Woodside Petroleum, Santos, Oil Search and Origin Energy climbed 1-2 percent as oil prices climbed after a record run of losses. Healthscope shares soared 14.4 percent after the company said it had received a second takeover offer, this time from Brookfield Capital Partners.

Agribusiness Elders jumped 19.7 percent after it reported a 9.1 percent increase in full-year underlying profit.

Seoul stocks ended slightly lower as large-cap bio shares fell heavily. The benchmark Kospi dropped 5.65 points or 0.27 percent to 2,080.44. Samsung BioLogics plunged as much as 22.4 percent ahead of an announcement by South Korea’s financial regulator over its accounting practices.

New Zealand shares eked out modest gains, with the benchmark S&P/NZX 50 index closing up 25.45 points or 0.28 percent at 8,956.85. Z Energy shares rallied 1.9 percent to extend last week’s recovery while Fletcher Building lost 3 percent.

U.S. stocks fell on Friday, with a spate of weak earnings, falling energy prices on concerns over a supply glut and worries about inflation weighing on markets.

The Dow dropped 0.8 percent, the tech-heavy Nasdaq Composite tumbled 1.7 percent and the S&P 500 lost 0.9 percent.

China’s Inflation Steady At 2.5%

China’s consumer prices increased at a steady pace in October, while producer price inflation slowed for the fourth consecutive month on weaker manufacturing activity, official data showed Friday.

Inflation remained unchanged at 2.5 percent in October, the highest since February, the National Bureau of Statistics reported. The rate also came in line with economists’ expectations.

Nonetheless, inflation remains below the government’s full year-target of around 3 percent.

Food prices advanced 3.3 percent and non-food prices climbed 2.4 percent annually.

On a monthly basis, consumer price inflation slowed to 0.2 percent from 0.7 percent in September.

Another report from NBS showed that producer price inflation eased to a 7-month low of 3.3 percent in October, as expected, from 3.6 percent in September.

Month-on-month, producer prices gained 0.4 percent versus 0.6 percent rise in September.

Given that the elevated level of headline inflation is almost entirely due to temporary increases in food and energy price inflation, the People’s Bank is unlikely to be too worried, Chang Liu, an economist at Capital Economics, said.

Indeed, policymakers will pay more attention to evidence that underlying price pressures remain subdued and will continue to ease policy over the coming months to shore up economic activity, the economist added.