HONG KONG: Asian stocks fell on Thursday (Nov 16) pausing the heavy gains made this week, as fresh Chinese data showed prolonged weakness in the property sector and dented some of the recent optimism about a recovery in the world’s second-largest economy.
While data released this week showed China’s industrial and retail sectors making a comeback, a sharp drop in property investment and weak home prices suggest persistent problems in the sector that could drag on the country’s overall recovery.
Meanwhile, Japanese exports grew for a second straight month in October but at a sharply slower pace due to slumping China-bound shipments of chips and steel.
“The weak economic data from both countries indicate the fact that the global economy is slowing down, highlighting ongoing macro headwinds that businesses face,” said Tina Teng, market analyst at CMC Markets.
“China’s housing crisis remained a major issue for the economy and weakened global consumer demands will likely continue to press on sentiment.”
European markets were set for a lower open, with pan-region Euro Stoxx 50 futures down 0.21 per cent, German DAX futures falling 0.11 per cent and FTSE futures dropping 0.11 per cent.
In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.4 per cent in afternoon trade although the index is up 7.1 per cent so far this month.
Australian shares were down 0.67 per cent as strong wage data indicated that inflationary pressures were still running high. Japan’s Nikkei stock index slid 0.18 per cent as investors sold stocks to lock in profits from the previous session’s sharp gains.
The MSCI Asia ex-Japan index, MSCI Emerging Market index and Nikkei all posted their biggest gains in a year, of 2.5 per cent or more, on Wednesday.
In China, stocks fell on Thursday partially because investors were disappointed by a top-level Sino-US meeting, with Shanghai’s blue-chip CSI300 index down 0.72 per cent and Hong Kong’s Hang Seng index dropping 1 per cent.
While US President Joe Biden and Chinese leader Xi Jinping had agreed to resume military-to-military communications and cooperate on anti-drug policies, a sign ties were improving, some investors were disappointed at the lack of any major breakthroughs in the talks.
