Friday 05:45 BST. The fire lit under markets by news of Opec’s tentative agreement to cut oil production sputtered out, with Asian markets broadly down following a lacklustre US trading session.
Taking the lead from Wall Street’s S&P 500 Index, which closed down 0.9 per cent on Thursday, equities across the Asia-Pacific region struggled to hold onto the previous day’s gains.
The declines followed the release of data showing that Japanese consumer prices remained in deflationary territory, household spending tumbled in August, and the country’s jobless rate nudged up.
Marcel Thieliant, senior Japan economist at Capital Economics, said that while consumer spending data “send conflicting messages for third-quarter gross domestic product growth, the solid rise in industrial production in August suggests that Japan’s economy continued to recover in the third quarter”.
The yen strengthened 0.33 per cent to ¥101.34 against the dollar. Japan’s broad Topix index was down 1.2 per cent, dragged lower by losses in utilities providers such as Kansai Electric Power, which fell 3.9 per cent. The Nikkei 225 also fell 1.3 per cent.
Australia’s S&P/ASX 200 benchmark index fell 0.6 per cent, with as few as a dozen stocks in positive territory. The blue chip S&P/ASX 20 had just a three stocks rising.
In Hong Kong, the benchmark Hang Seng Index fell 1.3 per cent as only four of 50 members managed to exit negative territory. Shares listed on the mainland were faring slightly better, with the Shanghai Composite Index up 0.1 per cent and the tech-focused Shenzhen Composite rising 0.3 per cent.
Futures were tipping the S&P 500 to open down 0.2 per cent, while European stocks are expected to open flat.
Chris Weston, IG chief market strategist, said that following reports that hedge funds were pulling business from Deutsche Bank, traders’ attention in Europe would “be focused on the open of the German DAX and it seems likely that the media focus will be on their subordinated credit-default swaps (CDS) as well”.
Major currencies in the region were mixed as the dollar index, which measures the US currency against a basket of international peers, stood virtually flat at 95.558.
The Australian dollar, often viewed as a proxy for Chinese growth, briefly strengthened following a Caixin manufacturing PMI reading that showed a return to marginal growth in September, but was unable to hold on to those gains and weakened 0.1 per cent against the greenback to $0.7625.
After pushing upward earlier in the week, Brent crude, the international benchmark, rolled back more of its recent gains to be down 0.6 per cent at $49.93 a barrel. West Texas Intermediate, the US benchmark, was down 0.5 per cent at $47.58 a barrel.
Fixed income markets were muted, with the yield (which moves inversely to price) on US 10-year Treasuries falling 2 basis points to 1.5445 per cent in Asian trade. The yield on 10-year Japanese government bonds was up 1 basis point at minus 0.072 per cent while that of Australian 10-year government bonds shed 6 basis points to 1.914 per cent.
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