Asian shares were mixed on Friday, falling in China, Japan, South Korea and India, but rising again in Australia.
China stocks closed down as concerns over rising Covid cases and a sluggish economic recovery lingered, while real estate developers shone during the week on expectations that authorities would support the embattled sector.
The blue-chip CSI300 index fell 0.7%, while the Shanghai Composite Index lost 0.6%. The Hang Seng rose 0.1%, and the China Enterprises Index gained 0.3%.
For the week, the CSI 300 index was down nearly 1%, while the Hang Seng Index dropped 2%.
Concerns about rising Covid cases lingered with China reporting 2,804 new cases for Thursday, down slightly from over 3,000 daily cases the previous two days.
China is widely expected to lower its benchmark lending rates on Monday, a Reuters survey showed, with a vast majority of participants predicting a deeper cut to the mortgage reference rate to lift the ailing property sector and the overall economy.
The five-year tenor, where all 30 participants expected a cut, influences the pricing of home mortgages.
Property developers soared 6.5% for the week, amid stimulus expectations as sources said China will guarantee new onshore bond issues by a few select private developers.
Japanese Stocks Pare Early Gains
Japanese stocks surged at the open alongside an early slide in the value of the yen before paring gains as stocks that powered a recent rally slipped.
The Nikkei share average closed down nearly 1% on the previous day. The broader Topix index was up 0.3%.
The yen earlier tested a milestone of its own, with the greenback rising to 136.38 against the currency for the first time since July 28. It last traded at 136.08.
“While lots of stocks are making gains right now, some major contributors to the index that have led the recent rally like Fast Retailing are weak, so overall the movement is sluggish,” said a market participant at a domestic securities firm.
The Nikkei is up 1.2% so far this week. Of its 225 constituents, 128 gained on Friday morning while 91 were down and six flat.
Fast Retailing, the operator of clothing brands including Uniqlo, fell 1.45% by the break, which had the biggest impact on the index due to its price-weighting.
Founder and CEO Tadashi Yanai has been outspoken on the impact of a weak yen on his import-heavy business, saying there’s “absolutely no merit” to the currency’s depreciation.
Korea Shares Down Again, as Won Hits 13-Year Low
South Korean shares fell for the third straight session on Friday, marking their first weekly decline in five, as concerns over weighed over the tightening stance reaffirmed by US monetary policymakers.
Meanwhile, the Korean won touched a more than 13-year low, while the benchmark bond yield jumped.
The benchmark KOSPI ended down 15.36 points, or 0.6%, at 2,492.69, falling for a third straight session after hitting a more than two-month high earlier the week.
The index fell 1.4% for the week, its biggest weekly fall since early July, ending a four-week rising streak.
The Federal Reserve needs to keep raising borrowing costs to bring high inflation under control, a string of US central bank officials said on Thursday, even as they debated how fast and how high to lift them.
On top of their comments, robust economic data in the United States boosted the dollar, leading foreign investors to sell local stocks, said Huh Jae-hwan, analyst at Eugene Investment and Securities.
Overseas investors were net sellers of shares worth 89.6 billion won ($67.54 million) on the main board, after a three-session buying streak.
Among heavyweights, technology giant Samsung Electronics fell 1% but SK Hynix rose 0.7%, while battery maker LG Energy Solution lost 1.1%.
Internet-based lender Kakaobank dropped 8.2% to its lowest close on record. Mobile financial services provider Kakaopay rebounded 0.6% after a 6.6% drop the previous session, while parent Kakao fell 3.2%.
The won was last quoted at 1,325.9 per dollar on the onshore settlement platform, 0.39% lower than its previous close, after hitting its weakest since April 29, 2009 at 1,328.8. For the week, the currency lost 1.77% against dollar, the biggest drop in five weeks.
Australian Shares Climb for Fifth Week
Australian shares ended little changed on Friday but posted their fifth consecutive weekly gain on robust earnings, local jobs and wages data and the central bank’s cautious rate hike stance.
The S&P/ASX 200 index ended the session 0.02% higher at 7,114.50, weighed down by weak earnings reports. The benchmark rose 1.2% for the week.
Domestic energy stocks surged 4% to close at their highest level since June 10. The sub-index rose 2.8% for the week.
Whitehaven Coal and New Hope Corp climbed 6.2% and 4%, respectively, on Friday as thermal coal prices soared on rising demand from Europe, which is looking for alternative suppliers to Russia.
Miners and gold stocks firmed 1% and 1.1%, respectively. Newcrest Mining jumped 3.6% after the country’s largest gold miner topped annual profit estimates.
Heavyweight financial stocks fell 0.8% and were the biggest drag on the benchmark. The so-called “big four” banks declined between 0.7% and 2%.
Indian Shares Dip
Indian shares started strongly on Friday and appeared on track for their fifth consecutive weekly gain, but profit taking erased the early gains.
Both the NSE Nifty 50 index and the S&P BSE Sensex were down by over 1% near the close of trading, although that was still enough to see a small weekly rise, for a fifth straight week.
Shares of oil-to-telecoms conglomerate and market heavyweight Reliance Industries fell nearly 2% following an overnight announcement on government raising tax on fuel exports after cutting them a little over two weeks ago, and slashing a windfall tax on locally produced crude oil.
- Reuters with additional editing by Jim Pollard