Asian stocks had their biggest weekly drop since September as investors awaited data on Chinese retail sales and industrial production.
Chinese shares slid after a report Fosun International Ltd (復星國際) chairman Guo Guangchang (郭廣昌) was missing added to concerns that slowing economic growth, a weakening yuan and an anti-corruption campaign is clouding the outlook for corporate profits.
In a choppy final trading day of the week, Japanese shares rallied, while equities in China retreated.
Photo: Reuters
The MSCI Asia Pacific Index slipped 0.3 percent to 129.4, taking its weekly drop to 2 percent, a third weekly retreat. The gauge is down 6.2 percent this year as a rout in commodities and slowing Chinese growth weighs on the earnings prospects of companies from Sydney to Tokyo, before a US Federal Reserve decision next week on whether to raise interest rates.
“Asian markets had a mixed day to end the week,” said Angus Nicholson, Melbourne-based market analyst at IG Ltd. “Japanese markets have clearly reached levels where investors are happy with valuations again. Chinese markets were spooked by the ‘disappearance’ of Fosun’s chairman, quite likely by China’s anti-corruption department.”
The billionaire founder of the Chinese conglomerate has become unreachable, Caixin magazine reported on its Web site, citing people it did not identify. Fosun’s stock tumbled more than 11 percent to US$1.55 in over-the-counter trading in New York on Thursday, the biggest decline since August.
Bonds in Fosun International fell by a record and the company suspended its shares in Hong Kong after the report, while other mainland stocks with ties to Fosun also requested halts.
“Since lots of senior managers have gone missing like this case, it has negative implications on the market even though nobody knows what has happened,” said Ronald Wan, chief executive at Partners Capital International in Hong Kong. “Investors tend to be more cautious now.”
Hong Kong’s Hang Seng Index slipped 1.1 percent, extending a weekly loss to 3.5 percent, the most in 14 weeks. The Shanghai Composite lost 0.6 percent on Friday.
Chinese retail sales likely rose 11.1 percent last month from the previous year, after an 11 percent gain the month before, according to the median estimate in a Bloomberg survey of economists. Industrial production is expected to advance 5.7 percent, up from 5.6 percent in October.
In Taipei, the TAIEX took another beating on Friday to end below the 8,200-point mark amid fears that foreign institutions would continue to move funds out of the local equity market after a recent heavy sell-off, dealers said.
Many investors appeared reluctant to keep their holdings and continued to dump stocks, in particular big-cap issues, amid rising political uncertainty as the presidential election approaches, they said.
However, Hon Hai Precision Industry Co (鴻海) bucked the downtrend in the broader market to move higher after the world’s largest contract electronics maker a day earlier reported record-high sales for last month, they added.
The assembler of iPhones and iPads for Apple Inc gained 0.24 percent to close at NT$83.10 after it reported consolidated sales of NT$517.52 billion (US$15.7 million) for last month, up 2.89 percent from October.
The weighted index on the Taiwan Stock Exchange closed down 1.2 percent lower at 8,115.89 on Friday. It was also down 3.4 percent from 8,398.60 from the previous week.
Japan’s TOPIX added 0.6 percent and the Nikkei 225 Stock Average rallied 1 percent. Australia’s S&P/ASX 200 Index declined 0.2 percent, while New Zealand’s S&P/NZX 50 Index advanced 0.5 percent.
South Korea’s KOSPI lost 0.2 percent, Singapore’s Straits Times Index declined 0.5 percent and India’s S&P BSE SENSEX Index retreated 0.8 percent.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure