Asia report: Markets mixed on China inflation, coronavirus developments
Markets in Asia were mixed on Monday, with stocks in mainland China in the green as investors digested fresh inflation data from the country, as well as the latest developments in the ongoing coronavirus outbreak.
In Japan, the Nikkei 225 was down 0.6% at 23,685.98, as the yen weakened 0.03% against the dollar to last trade at JPY 109.78.
Automation specialist Fanuc was down 1.1%, but among the benchmark’s other major components, fashion firm Fast Retailing rose 0.24% and technology giant SoftBank Group added 1.5%.
The broader Topix index was 0.72% lower by the end of trading in Tokyo, finishing its session at 1,719.64.
On the mainland, the Shanghai Composite was 0.51% firmer at 2,890.49, while the smaller, technology-heavy Shenzhen Composite surged 1.21% to 1,757.26.
China’s producer price index data for January was released during the session, rising 0.1% year-on-year according to official statistics.
At the same time, consumer prices were up 5.4% over the previous year, well ahead of the 4.9% increase predicted by analysts polled by Reuters.
South Korea’s Kospi fell 0.49% to 2,201.07, while the Hang Seng Index in Hong Kong slid 0.59% to 27,241.34.
Shares in hotpot restaurant operators led the declines in the special administrative region, with Haidilao down 4.06% and Xiabuxiabu Catering Management 6.7% weaker.
Investors were growing concerned about hotpot restaurants amid the ongoing coronavirus outbreak, as the style of dining involves customers sharing a communal pot of hot broth at a table.
Both of the blue-chip technology stocks were weaker in Seoul, with Samsung Electronics down 1.16% and SK Hynix off 0.5%.
The official death toll from the novel coronavirus surpassed that of the 2003 outbreak of severe acute respiratory syndrome at the weekend, as investors continued to watch its spread.
Factories in China were set to finally reopen on Monday, after an extended Lunar New Year shutdown period in a bid to control the virus, although many were expected to remain closed for a longer period.
That was leading to concerns among businesses and investors around disruptions to supply chains, with analysts beginning to fear that the 2020 holiday season could be affected for electronics manufacturers.
“All you need is liquidity … coronavirus is at the forefront of the risk radar this week, but all the markets really care about is liquidity,” said Neil Wilson, chief market analyst at Markets.com.
“New cases in China are stabilising but it’s now more deadly than SARS was.
“What’s still unknown is the real economic damage this has wrought.”
Wilson noted that, while China was getting back to work after its extended holiday, there would not be the immediate restarting of every factory assembly line.
“Mask shortages and a problem with displaced workers getting back home following the [Lunar] New Year holiday means this is not business as usual.
“Moreover there is ample evidence that local authorities are taking a more cautious approach and mandating a later return to work in their localities than Beijing says - 1 March in some cases.”
Oil prices were lower at the end of the Asian day, with Brent crude last down 0.76% at $54.06 per barrel, and West Texas Intermediate sliding 0.8% to $49.92.
In Australia, the S&P/ASX 200 was 0.14% lower at 7,012.50, while across the Tasman Sea, New Zealand’s S&P/NZX 50 was off 0.5% at 11,702.59.
Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.37% at AUD 1.4929, and the Kiwi advancing 0.12% to NZD 1.5602.