Asian stocks ended mostly lower on Friday, with Japanese shares rallying following the announcement of a massive stimulus package, while other major markets fell after the release of China’s December inflation figures. China’s annual consumer price inflation quickened to a seven-month high of 2.5 percent in December, the National Bureau of Statistics said today, limiting the room for further policy easing to support an ongoing economic recovery.
Japanese shares rose for the third straight session, hitting a 23-month high after the government said it would spend 10.3 trillion yen ($116 billion) to end deflation and lift the economy out of recession. Prime Minister Shinzo Abe announced that the new stimulus package will add 2 percent to the nation’s real economic growth. The Nikkei average rose 1.4 percent to close above the 10,800 mark for the first time since February 21, 2011, while the broader Topix index added 1.1 percent.
The yen tumbled to multi-year lows early in the session after official data showed Japan posted a current account deficit for the first time in 10 months in November, hurt by a dip in exports amid weak global demand and higher energy imports. At 222.4 billion yen, the headline figure was well shy of forecasts for a shortfall of 17.1 billion yen following the 376.9 billion yen surplus in October.
Automakers Toyota Motor and Honda Motor rose more than a percent each, with the yen’s renewed weakness buoying sentiment. Heavyweight Fast Retailing soared 4.8 percent after the company revised up its fiscal 2013 earnings forecast. Pharma stocks gained ground after research studies showed induced pluripotent stem (iPS) cells can be grown into different body cells. Takeda Pharmaceutical advanced 3.1 percent, while Astellas Pharma jumped 7.4 percent.
China’s Shanghai Composite index retreated 1.8 percent as higher than expected inflation numbers triggered profit taking following recent sharp gains. Property developers and brokerage stocks bore the brunt of the selling. Hong Kong’s Hang Seng index ended 0.4 percent lower.
Australian shares lost ground, dragged down by miners as tropical cyclone Narelle strengthened to category four, affecting their operations. The benchmark S&P/ASX 200 shed 0.3 percent, while the broader All Ordinaries index slipped 0.2 percent. BHP Billiton and Rio Tinto lost about 2 percent each, while smaller rival Fortescue Metals Group declined 2.5 percent.
Banks ended on a mixed note amid fading hopes of an RBA rate cut in February. Westpac eased marginally and Commonwealth declined 0.4 percent, but ANZ and NAB rose 0.4 percent and 0.6 percent, respectively. Investors lapped up defensive stocks, lifting Wesfarmers and Woolworths up 0.3 percent and 0.6 percent, respectively.South Korea’s Kospi average fell half a percent on institutional selling after the Bank of Korea held borrowing costs unchanged for a third month, as widely expected by economists. The central bank cut its economic growth forecast for this year to 2.8 percent, citing slower corporate investment and the global economic uncertainties. Automakers led the declines after the won climbed to a 17-month high versus the dollar. Hyundai Motor, the nation’s biggest automaker, fell 1.7 percent, while shares of its affiliate Kia Motors retreated 2.2 percent.
New Zealand shares rose for a fifth consecutive session despite mixed regional cues. The benchmark NZX-50 index rose 0.3 percent to a fresh five-year high. Fletcher Building, the nation’s largest construction company, rose 0.6 percent to hit a 19-month high on analyst upgrades, while another heavyweight Telecom, which has an attractive dividend yield of 13 percent, added 0.4 percent.
Carpet maker Cavalier and Skellerup Holdings, which manufactures milking equipment and rubber goods, both rose about 1.8 percent each. Among the prominent decliners, jeweler Michael Hill International tumbled 3.2 percent after saying its sales growth stalled in the second quarter.
India’s Sensex was little changed, reversing early gains, with gains in technology stocks limiting the downside. Bellwether Infosys reported higher than expected Q3 profit and raised its revenue growth forecast for the year ending March 2013, sending its shares 16 percent higher on the National Stock Exchange. Meanwhile, India’s index of industrial production contracted to a four-month low of 0.1 percent in November from a year earlier, government data showed, boosting hopes that the RBI may cut rates later this month.
Elsewhere, benchmark indexes in Indonesia, Malaysia and Singapore were down between 0.3 percent and 0.4 percent, while Taiwan’s Weighted average edged up marginally.
U.S. stocks fluctuated before ending notably higher overnight, as upbeat Chinese trade data outweighed a report from the Labor Department showing an increase in initial jobless claims in the week ended January 5. The Dow rose 0.6 percent, the tech-heavy Nasdaq gained half a percent and the S&P 500 advanced 0.8 percent.
by RTT Staff Writer
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