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Investing.com-- Asian stocks retreated on Friday as a rebound in technology shares lost steam, while Chinese markets were pressured by renewed concerns over a property market meltdown in the country.
Japanese shares moved in a flat-to-low range as a swathe of data showed unexpected resilience in the economy, driving up expectations for an interest rate hike by the Bank of Japan.
Regional markets received few trading cues on account of the U.S. Thanksgiving holiday on Thursday. S&P 500 Futures rose 0.1% by 20:34 ET (01:34 GMT) ahead of a shortened trading session on Friday.
Overall losses in Asian stocks were still limited by optimism over a U.S. interest rate cut in December. But most bourses in the region were nursing losses for November, following a tumble in tech valuations through most of the month.
Chinese stocks dip as Vanke bond rout fuels property market concerns
China’s mainland Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell about 0.3% each, while Hong Kong’s Hang Seng index lost 0.1%.
Chinese markets were pressured by continued losses in property shares, with China Vanke (SZ:000002) falling an additional 1.5% in Shenzhen trade, as investors dumped the company’s bonds en masse.
Reports this week said the company was seeking to restructure some of its debt obligations, sparking concerns that Vanke will be the next domino to fall in China’s already beleaguered real estate sector.
A default by the state-backed Vanke could eclipse earlier defaults seen in private majors such as Evergrande and Country Garden. More disruptions in the property market also stand to weigh on economic growth, given the sector’s large contribution to the Chinese economy.
Mainland China indexes were trading down between 2% and 3% in November, while the Hang Seng was flat.
Japan flat as strong data drives BOJ rate hike bets
Japan’s Nikkei 225 index fell 0.2%, while the TOPIX was flat as investors digested a string of key economic indicators for October and November.
Tokyo CPI inflation, which acts as a bellwether for national inflation, read steady for November, while core inflation also remained above the BOJ’s 2% annual target.
Separate data showed Japanese industrial production unexpectedly rose in October, while retail sales grew more than expected.
But Japan’s unemployment rate remained unexpectedly steady in October, while job applications weakened.
Still, the host of positive economic readings drummed up bets that the BOJ will have enough headroom to raise interest rates soon. The BOJ signaled this week that policymakers will consider raising rates during December’s meeting.
Capital Economics analysts, reacting to the inflation and labor data, said the “case for tighter monetary policy remains intact” in Japan, with the BOJ pipped for a hike by as soon as December.
Still, the central bank is expected to face resistance from the Sanae Takaichi government, which has largely called for looser financial conditions.
A bitter diplomatic row between China and Japan also continued to weigh on local stocks.The Nikkei 225 was down 4.5% in November and was the worst performer in Asia, hurt chiefly by a wipeout in tech valuations.
Broader Asian stocks moved in a flat-to-low range on Friday, and were nursing a mostly negative performance for November.
South Korea’s KOSPI fell nearly 1% as a rebound in tech slowed. The index was also down nearly 4% in November.
Australia’s ASX 200 was flat and was trading down 2.9% for November. The ASX was battered by increasing conviction that the Reserve Bank will not cut interest rates further amid sticky inflation and a mostly tight labor market.
Futures for India’s Nifty 50 index were flat on Friday, before closely-watched gross domestic product data for the September quarter. The Nifty was also trading up 1.9% in November, aided by a relatively smaller exposure to tech, while record-low inflation readings drummed up bets on more interest rate cuts by the Reserve Bank of India.
Singapore’s Straits Times index rose 0.4% and was trading up 2.2% for November, also benefiting from a relatively small exposure to tech.