Asian stocks fell broadly on Monday as parts of the region continued to see new coronavirus spikes and reports emerged that the Trump administration is considering blacklisting Chinese chipmaker SMIC as well as oil and gas producer CNOOC.
Shares fell in China and Hong Kong after reports of potential new sanctions on Chinese companies by the outgoing Trump administration and a warning by authorities that Hong Kong’s fourth coronavirus wave ‘will be more severe’ than the last.
The benchmark Shanghai Composite index slid 16.55 points, or 0.49 percent, to 3,391.76, while Hong Kong’s Hang Seng index fell as much as 553.19 points, or 2.06 percent, to 26,341.49.
The manufacturing sector in China continued to expand in November, and at a faster pace, the National Bureau of Statistics said today with a manufacturing PMI score of 52.1. That beat expectations for a reading of 51.5 and was up from 51.4 in October.
The non-manufacturing PMI came in with a score of 56.4, beating expectations for 56.3 and up from 56.2 in the previous month.
Japanese shares ended lower as concerns about spiking coronavirus cases overshadowed encouraging economic data.
The Nikkei average ended down 211.09 points, or 0.79 percent, at 26,433.62, snapping a four-day rally. But the index soared as much as 15 percent for the month, marking its biggest monthly gain since January 1994 on optimism over progress in Covid-19 vaccine development and Joe Biden’s U.S. presidential win.
The broader Topix index dropped 31.60 points, or 1.77 percent, to 1,754.92 but registered its best monthly gain since April 2013.
Automakers Honda Motor, Toyota, Nissan and Mazda lost 3-6 percent as the yen rose against the U.S. dollar. ANA Holdings declined 0.9 percent after announcing a new share sale.
On the economic front, a government report showed that industrial output in Japan climbed a seasonally adjusted 3.8 percent month-on-month in October.
That was roughly in line with expectations and down from the 3.9 percent gain in September.
The value of retail sales in Japan was up a seasonally adjusted 0.4 percent sequentially in October – beating expectations for a 0.1 percent increase following the 0.1 percent decline in September.
Australian markets ended sharply lower as the country threatened to take China to the World Trade Organization over barley duties. Investors also awaited GDP data due on Wednesday for directional cues.
The benchmark S&P/ASX 200 index ended down 83.30 points, or 1.26 percent, at 6,517.80 but rose more than 10 percent for the month. The broader All Ordinaries index fell 74.70 points, or 1.10 percent, to 6,742.10.
The big four banks fell around 2 percent while mining heavyweights BHP and Rio Tinto gave up 1.7 percent and 0.6 percent, respectively.
Treasury Wine Estates shares slumped 6.9 percent. The company said it will implement a series of plans to mitigate the effects of Chinese tariffs on Australian wine exports.
Airline Qantas Airways tumbled 2.5 percent after confirming it would cut 2,000 more jobs.
Private sector credit in Australia was unchanged on a monthly basis for the second straight month in October, the Reserve Bank of Australia said today in a report. On a yearly basis, credit was up 1.8 percent after rising 2.0 percent in the previous month.
Another report showed that company profits in Australia were up a seasonally adjusted 3.2 percent sequentially in the third quarter of 2020. That was shy of expectations for a gain of 4.5 percent following the 15 percent spike in September.
Seoul stocks fell sharply as downbeat economic data prompted traders to book some profits after the recent rally. The benchmark Kospi tumbled 42.11 points, or 1.60 percent, to 2,591.34 after hitting a record high in the previous session. SK Hynix, LG Chem, Samsung Electronics, Naver and Samsung SDI dropped 1-3 percent.
Industrial production in South Korea fell a seasonally adjusted 1.2 percent sequentially in October, Statistics Korea said. That missed expectations for a fall of 1.0 percent following the 5.4 percent gain in September.
The total value of retail sales in South Korea was down a seasonally adjusted 0.9 percent month-on-month in October – missing expectations for a decline of 0.5 percent following the 1.7 percent increase in September.
New Zealand shares rose sharply as investors cheered promising announcements from three major phase-three Covid-19 vaccine trials.
The benchmark NZX 50 index rose 128.69 points, or 1.02 percent, to 12,768.52 and ended the month up by more than 5 percent, marking its second consecutive monthly gain.
U.S. stocks rose in thin post-holiday trading on Friday as President elect Joe Biden and his team started the process of transition into the White House and retailers kicked off the Christmas shopping season with optimistic expectations despite a surge in Covid-19 cases.
The Dow Jones Industrial Average edged up 0.1 percent, while the S&P 500 gained 0.2 percent and the tech-heavy Nasdaq Composite rose 0.9 percent to reach record closing highs.
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