Asia report: Stocks mixed on fresh Japan producer inflation data

26th Mar 2024 10:38

(Sharecast News) - Asia-Pacific markets closed with a mixed performance on Tuesday, as investors assessed a range of economic data.

South Korea's benchmark Kospi surged to two-year highs, as Japan's service producer price index for February recorded an increase, and Singapore's manufacturing output rebounded into growth territory.

"Asian stock markets are experiencing a mix of trading activity, influenced by the overall negative performance of Wall Street the previous day," said TickMill market analyst Patrick Munnelly.

"Traders appear hesitant to make substantial moves as they await the release of important economic data, such as US inflation numbers on Friday.

"Most Asian markets ended lower on Monday."

Munnelly noted that the US Fed indicated a possibility of three rate cuts this year, while the European Central Bank and the Bank of England were also set to lower interest rates in the near future.

"Continuing from the declines in the last trading day, the Japanese stock market is slightly down in volatile trading on Tuesday.

"The Nikkei 225 has dropped below the 40,400 handle, influenced by the overall negative performance of Wall Street yesterday.

"The losses in index heavyweights and financial stocks are somewhat balanced out by gains in exporters and technology stocks."

Markets finish in mixed state across the region

In Japan, the Nikkei 225 experienced a marginal decline of 0.04%, closing at 40,398.03, while the Topix index edged up by 0.11% to reach 2,780.80.

Among the leading losers on Tokyo's benchmark was Tokyu Corporation, which slid 8.61%, followed by Nissan Motor slipping 3.94%, and Odakyu Electric Railway dipping 2.45%.

China's markets displayed resilience, with the Shanghai Composite rising 0.17% to 3,031.48 and the Shenzhen Component climbing by 0.28% to 9,449.43.

Leading gainers in Shanghai included Beijing Dalong Weiye Real Estate Development, ahead 10.18%, and Grace Fabric Technology Co, which advanced 10.06%.

Hong Kong's Hang Seng Index recorded a gain of 0.88%, closing at 16,618.32, led higher by China Merchants Bank, Tencent Holdings, and Baidu, which rose by 4.33%, 3.74%, and 3.67%, respectively.

In South Korea, the Kospi index advanced 0.71% to 2,757.09, with NCsoft Corporation up 8.45% and Hanwha Aerospace managing gains of 6.14% by the end of trading.

Australia's S&P/ASX 200 experienced a decline of 0.41%, closing at 7,780.20, with Sydney's losses led by Atlas Arteria and Sandfire Resources, falling by 5.06% and 4.96%, respectively.

New Zealand's S&P/NZX 50 also ended in negative territory, slipping by 0.29% to 12,031.81.

Leading the losses was Restaurant Brands New Zealand, down 2.94%, and Fletcher Building, which lost 2.4%.

In currency markets, the dollar was last down 0.1% on the yen, trading at JPY 151.27, while it declined 0.27% against the Aussie to AUD 1.5250, as it dropped 0.41% against the Kiwi to change hands at NZD 1.6589.

On the oil front, Brent crude futures were last down 0.4% on ICE to $86.40 per barrel, while the NYMEX quote for West Texas Intermediate slipped 0.33% to $81.68.

Japan's producer prices rise, Singapore manufacturing returns to growth

In economic news, fresh official data showed Japan's services producer price index (PPI) rising 2.1% year-on-year in February, mirroring the same rate of increase seen in January.

The news followed the decision by the Bank of Japan last week to end its negative interest rate policy, alongside other unconventional easing measures.

In Singapore, manufacturing saw a rise of 14.2% on a month-on-month basis in February, marking a significant turnaround from the revised 6.7% decline recorded in January.

The performance far exceeded expectations set in Reuters polling, which had pencilled in a 3.1% rise.

On a year-on-year basis, manufacturing output jumped 3.8%, surpassing the expected 0.5% increase projected by Reuters.

Singapore's economic development board highlighted that all segments of the country's manufacturing sector expanded during February, except for the general manufacturing and precision engineering sector.

Meanwhile, regulatory authorities in China intensified efforts to stimulate economic activity by urging banks to expedite the approval process for new loans to private property developers.

According to a report by Reuters, the banking regulator called for faster loan approvals, particularly for residential projects covered under the 'whitelist' mechanism, effective last week.

The 'whitelist' targets projects from state-backed and private developers requiring fresh financing totaling CNY 1.5trn (£164.18bn).

Reporting by Josh White for Sharecast.com.