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Investing.com-- Asian stocks were a mixed bag on Friday, with Chinese shares extending their stellar performance through August and remaining at recent multi-year peaks, while Japan’s Nikkei 225 retreated on a swathe of negative economic readings.
Regional markets took some encouragement from a mildly positive overnight close on Wall Street, where the S&P 500 hit a record high.
But overall gains in Wall Street were limited by caution over NVIDIA Corporation (NASDAQ:NVDA), which clocked somewhat middling earnings, and as investors awaited key PCE price index data– the Federal Reserve’s preferred inflation gauge– later on Friday.
S&P 500 Futures fell 0.1% in Asian trade.
Most Asian markets were sitting on gains through August, as the second-quarter earnings season delivered and as investors welcomed the prospect of lower U.S. interest rates.
Chinese markets were by far the best performers in the region.
Chinese stocks upbeat after stellar August
China’s Shanghai Shenzhen CSI 300 index rose 0.7% to a three-year high, while the Shanghai Composite index rose 0.4% and was just below a 10-year peak. Hong Kong’s Hang Seng index rose 0.7% and was close to a recent four-year high.
Mainland Chinese stocks vastly outperformed their regional peers in August, with the CSI 300 up 10.3% this month, while the Shanghai Composite was set for a 8.1% gain.
Chinese markets were encouraged by increasing efforts by Beijing to promote local chip production, while signs of continued softness in the economy ramped up bets that the government will dole out even more stimulus measures.
A major rally in Chinese chipmaking stocks was seen cooling on Friday, with artificial intelligence chips maker Cambricon Technologies falling 5% after rallying to record highs earlier in the week. The stock had doubled in value in August, and was up 20% this week after Nvidia expressed more doubts over its Chinese sales, driving up bets on more local chipmakers.
Semiconductor Manufacturing International Corp (HK:0981) and Hua Hong Semiconductor Ltd (HK:1347) fell 2.2% and 5% in Hong Kong trade, respectively.
The Hang Seng lagged with a modest 1.6% gain in August, as a technology sell-down in the latter half of the month weighed.
A host of major Hong Kong-listed Chinese companies are set to report earnings on Friday, including ecommerce giant Alibaba Group (HK:9988) and major banks Industrial and Commercial Bank of China Ltd (SS:601398), China Construction Bank Corp (HK:0939), and Bank of China Ltd (SS:601988).
Electric vehicle maker BYD Co Ltd (HK:1211) is also set to report half-year earnings later in the day.
Next week, Chinese purchasing managers index data for August is set to shed more light on the world’s second-largest economy, and could factor into expectations of more stimulus.
Japanese shares lag on negative data
Japan’s Nikkei 225 index fell 0.4%, while the TOPIX index shed 0.5% on Friday. Both indexes were trading up around 4% to 5% in August, having hit a series of record highs earlier in the month.
But a swathe of negative economic readings on Friday weighed. Japanese industrial production shrank more than expected in July, while retail sales data for the month also underwhelmed.
Adding to uncertainty over the economy, Tokyo consumer price index data for August showed inflation in Japan’s capital eased as expected. But core inflation remained sticky and above the Bank of Japan’s 2% annual target, keeping bets on more interest rate hikes by the BOJ largely in play.
Among broader Asian markets, South Korea’s KOSPI fell 0.2% as mixed earnings from Nvidia and its peers kept investors cautious towards tech and AI stocks. The KOSPI was also trading down 1.7% for August.
Australia’s ASX 200 fell 0.1% and was trading up 2.4% for August, having hit a series of record highs while also crossing the 9000 point level during the month.
Shipbuilder Austal Ltd (ASX:ASB) surged as much as 20% to a record high, after the company clocked strong annual earnings and announced a major contract with the Australian government.
Singapore’s Straits Times index rose 0.2%.
Indian shares fall, nurse August losses on US tariffs
India’s Nifty 50 index fell 0.1% in morning trade, and was nursing a 1.6% loss in August.
Indian shares were battered by the U.S. proceeding with its 50% trade tariffs on New Delhi, which took effect this Wednesday.
The tariffs were aimed chiefly at dissuading New Delhi’s purchase of Russian oil, with U.S. officials accusing India of funding Moscow’s war against Ukraine.
But India has largely rejected the accusations, with a host of recent reports showing that New Delhi intended to keep buying oil from Russia.
Analysts expect a mix of U.S. tariffs and potential oil supply disruptions to dampen India’s economic outlook.
Second-quarter gross domestic product data from the country is due later on Friday, and is expected to show growth cooling even before the imposition of U.S. tariffs.