Asian equity markets made gains early Friday, as a positive lead from Wall Street overnight offset concerns about a further decline in oil prices.
US stocks advanced on Thursday, cutting weekly losses, but euphoria over increased retail sales in November faded after crude dropped below USD 60 a barrel. The pullback escalated amid efforts to block a spending bill in the House, sparking worries of a government shutdown.
Halting a three-session losing streak, the Dow Jones Industrial Average ended up 0.4 percent, while the S&P 500 added 0.5 percent. The tech-heavy Nasdaq Composite gained 0.5 percent.
Oil prices remain in focus after US crude fell below USD 60 a barrel on Thursday, the first time in five years that it breached the psychologically-important support level, as oil markets extended this week’s losses on oversupply concerns.
In Asia, focus falls on China, which is due to hand in a raft of monthly economic reports. Industrial output, retail sales figures and fixed asset investment for November are due at 1330 SIN/HK.
Analysts expect the data deluge to show a persistent cooling in the world’s second-largest economy, adding pressure on authorities to ramp up stimulus measures after unexpectedly cutting interest rates last month.
Fixed-asset investment, an important driver of growth, likely grew at its slowest pace in nearly 13 years between January and November, rising 15.7 percent in that period from a year ago, a Reuters poll of 18 economists showed.
Industrial output is also expected to have decelerated last month, with Moody’s Analytics predicting an annual rise of 7.6 percent, slightly lower than October’s 7.7 percent gain. Beijing factories were temporarily closed in November to ease pollution before the Asia-Pacific Economic Cooperation (APEC) summit, which likely stalled production, the group said.
Retail sales could see an 11.6 percent annual rise, following October’s 11.5 percent gain, according to Citi.
Tokyo rises 1.3 percent
Japan’s Nikkei 225 started Friday on a strong note, after three consecutive losing sessions, on the back of the yen which weakened to 119 against the greenback. Japanese shares sagged to a two-week low in the previous session as a stronger currency and a downbeat machinery data curbed risk appetite.
Index heavyweights Fast Retailing and Softbank advanced more than 1 percent, respectively.
Exporter stocks traded mixed despite the softer yen, limiting gains on the bourse. While Canon climbed 4.4 percent, Nissan and Honda Motor lost more than 1 percent lower each, dragged down by Thursday’s announcements for wider recalls over Takata air bag issues.
Meanwhile, polls continue to point to a landslide win for the ruling coalition ahead of Sunday’s parliamentary election. Surveys showed the LDP-Komeito bloc would retain a two-third majority in parliament, giving Prime Minister Shinzo Abe the mandate he needs to continue his economic policies.
Mainland shares up
China’s benchmark Shanghai Composite index and Hong Kong’s Hang Seng index opened 0.8 and 0.4 percent higher, respectively.
Expectations for more stimulus are supporting mainland markets higher, said Donald Straszheim, Senior Managing Director, China Research at ISI Group. “Everybody in China now see stimulus coming, monetary easing, more interest rate cuts and more targeted fiscal measures. [Since] it’s a policy market and that’s what Chinese investors are seeing, it’s driving markets up.”
Sydney falls 0.3 percent
Australia’s benchmark S&P ASX 200 fell back into negative territory two hours into trade as banking majors extended the week’s losses.
Australia and New Zealand Banking Group and Commonwealth Bank of Australia retreated 0.8 percent each. Westpac Bank traded 0.6 percent lower ahead of its annual meeting later in the session.
Leighton Holdings erased early gains to ease 1.6 percent despite news that China Communications Construction has agreed to buy a building unit of the project development and contracting group for USD 951 million.
Meanwhile, the Australian dollar traded at USD 82.47 against the U.S. dollar – levels unseen since 30 June 2010 – after Reserve Bank of Australia governor Glenn Stevens said that the currency remains overvalued and USD 0.75 is his target, on Thursday.
Seoul up 0.3 percent
South Korean shares headed higher on the last trading session of the week after the benchmark Kospi index finished at a five-week low on Thursday.
LG Electronics outperformed with a 2.6 percent gain while retailer Shinsegae added 0.3 percent at the open.