Asian markets faced a broadly negative trading session Friday, with Chinese stocks leading the losses after Beijing’s highly anticipated growth policy announcements fell short of market expectations.
The Hang Seng Index in Hong Kong dropped 1.83%, while mainland China’s CSI 300 fell 2.37%, closing at 3,933.18. Investor sentiment soured as Beijing reaffirmed its recent policy shifts but failed to unveil significant new stimulus measures following Thursday’s high-profile meeting.
Mixed Performance Across Asia-Pacific Markets
While most Asia-Pacific markets followed Wall Street’s overnight losses, South Korea’s Kospi emerged as an outlier, rising 0.5% to 2,494.46 and extending its winning streak to four days. The Kosdaq also climbed 1.52% to 693.73, driven by gains in internet giant Kakao, which surged over 5%, and a 3.6% rise in Samsung Biologics, one of the Kospi’s largest companies by market capitalization.
Japan’s markets struggled, with the Nikkei 225 and Topix both shedding 0.95%, despite positive data from the Bank of Japan’s Tankan survey. The survey showed a better-than-expected rise in business optimism among large Japanese manufacturers, with the index climbing to 14 in Q4, up from 13 in Q3 and above the 12 forecasted by economists.
Australia’s S&P/ASX 200 also faced headwinds, dipping 0.41% to 8,296, marking its lowest close in nearly a month.
Global Context: Inflation Data Weighs on Sentiment
The negative sentiment in Asia was compounded by Wall Street’s overnight decline, where all three major indices fell after a hotter-than-expected U.S. Producer Price Index (PPI) report. The Dow Jones Industrial Average slid 0.53%, marking its sixth consecutive loss. The Nasdaq Composite fell 0.66%, retreating further from the 20,000 mark, while the S&P 500 shed 0.54%.
The PPI, a key measure of wholesale inflation, rose 0.4% in November, surpassing the 0.2% expected by analysts. On an annual basis, wholesale inflation climbed 3%, the largest increase since February 2023, renewing concerns about inflation’s impact on global monetary policy.
Looking Ahead: Key Inflation Data from India
India is set to release its November wholesale inflation figures later in the day. Economists expect a decline to 2.2%, down from October’s 2.36%, following Thursday’s report showing a drop in consumer inflation from a 14-month high.
