Asia report: Markets mixed as Beijing promises more fiscal stimulus

(Sharecast News) - Markets in the Asia-Pacific region showed a mixed performance on Monday, with Hong Kong leading gains following China's announcement of "more proactive" fiscal policies and a "moderately" looser monetary stance. Meanwhile, South Korea's Kospi saw steep losses amid political turbulence.

"The Chinese mainland and Hong Kong market have seen strong gains, and government bonds rose following a change in the politburo's language regarding monetary policy, indicating that additional easing measures may be implemented to support the struggling economy," said Patrick Munnelly at TickMill.

"Japan's Nikkei share average experienced a rise on Monday, bolstered by gains from Wall Street at the end of the previous week. However, profit-taking in major semiconductor-related stocks limited the overall increase."

Despite ongoing volatility, Munelly noted that oil prices had risen by about 0.4%, reflecting a modest response to the ousting of Syria's Assad, with no clear rush to safety among traders.

"The situation in the Middle East appears too complex for a decisive reaction.

"Russian president Putin faces significant challenges as he risks losing control of his only naval base in the Mediterranean, a consequence of supporting the Assad regime.

"Although Moscow claimed to have secured a deal to retain the base and associated facilities, it remains unclear if the rebels have accepted the agreement, as the potential loss would diminish Russia's influence in the region."

Markets mixed amid political developments in Korea, China

In equity markets, Hong Kong's Hang Seng Index jumped 2.76%, closing at 20,414.09, as investors welcomed the official readout of a key Chinese policy meeting outlining measures to boost domestic consumption.

The rally was led by WuXi AppTec, WuXi Biologics, and BYD Electronic International, which soared 9.62%, 9.57%, and 9.29%, respectively.

In contrast, Chinese mainland markets struggled - the Shanghai Composite edged down 0.05% to 3,402.53, while the Shenzhen Component dropped 0.55% to 10,731.66.

Major decliners in Shanghai included China Fortune Land Development, which fell 10.1%, alongside Epoxy Base Electronic Material and Nanjing Chemical Fibre, each down nearly 10%.

Japan's markets posted modest gains, with the Nikkei 225 rising 0.18% to 39,160.50 and the Topix adding 0.27% to 2,734.56.

Key contributors to the uptick on Tokyo's benchmark included Rakuten, which climbed 6.73%, and Yamato Holdings, up 3.67%.

South Korea's Kospi 100 plunged 2.46% to 2,373.59 as political instability weighed heavily on sentiment.

The fallout from president Yoon Suk Yeol's survival of an impeachment vote, coupled with ongoing unrest related to a brief martial law declaration, drove steep losses in Korea Zinc, Kumyang, and LG Chemicals, which fell 15.33%, 8.21%, and 7.5%, respectively.

Australia's S&P/ASX 200 inched up 0.03% to 8,423.00, supported by gains in GQG Partners and Tuas, which rose 6.25% and 5.59%.

Across the Tasman Sea, New Zealand's S&P/NZX 50 dipped slightly, down 0.06% to 12,801.80, as losses in Oceania Healthcare and ANZ Group weighed on the index.

In currency markets, the dollar was last up 0.29% on the yen to trade at JPY 150.43, while it weakened 0.75% against the Aussie to AUD 1.5529, and retreated 0.52% from the Kiwi, changing hands at NZD 1.7059.

Commodities saw upward movement, with Brent crude futures last ahead 1.03% on ICE at $71.85 per barrel, and the NYMEX quote for West Texas Intermediate rising 1.21% to $68.01.

Consumer prices rise less than expected in China as Beijing promises stimulus

In economic news, China's inflation data for November revealed weaker-than-expected consumer price growth, underscoring the challenges facing the world's second-largest economy.

Consumer prices rose just 0.2% year-on-year, falling short of analysts' forecasts of a 0.5% increase and down from October's 0.3% pace, according to the National Bureau of Statistics.

Meanwhile, the producer price index fell 2.5% year-on-year, marking its 26th consecutive month of decline, though the drop was less steep than the 2.8% decline anticipated in a Reuters poll.

In response to economic pressures, China's leadership signalled plans for intensified stimulus efforts.

An official readout from a key policy meeting chaired by president Xi Jinping highlighted commitments to "more proactive" fiscal policies and "moderately" looser monetary measures.

The government was aiming to stabilise property and stock markets and strengthen "unconventional counter-cyclical" policies to support domestic consumption.

Elsewhere in Asia, Japan revised its third-quarter gross domestic product growth upward to 0.3% quarter-on-quarter, exceeding initial estimates of 0.2%.

The revision also surpassed analysts' expectations of no change.

Reporting by Josh White for Sharecast.com.