Asian stocks weakened after minutes of a US Federal Reserve meeting signaled bond purchases may be cut sooner than expected, erasing earlier gains made after China outlined its broadest economic reforms since the 1990s.
Newcrest Mining Ltd slipped 11 percent, pacing declines among gold producers as prices for the precious metal dropped on Fed tapering bets.
Citic Securities Co jumped 14 percent in Hong Kong, leading gains among Chinese brokerages, as the government flagged policy changes that may lead to ending the ban on mainland initial public offerings.
Honda Motor Co rose 5 percent, leading Japanese exporters higher, as the yen headed for its longest streak of weekly losses since February.
About five shares gained for every four that fell on the MSCI Asia Pacific Index, which declined 0.2 percent to 141.23 this week. The measure advanced 9 percent this year through Friday on bets the Fed would maintain record stimulus, the Bank of Japan’s efforts to weaken the yen and signs China’s economy is improving.
“Overall the underlying sentiment is quite bullish, especially towards Chinese companies,” said Alex Wong, a Hong Kong-based director at Ample Capital Ltd. “People are still chasing China stocks as they remain bullish on sectors like insurers, securities and coal. Positive sentiment is being carried forward by the plenum.”
Chinese shares are on the cusp of a historic bull run, a research note from Jefferies Group LLC said. Comprehensive reform decisions from the Chinese Communist Party (CCP) plenum impressed “tremendously,” with a significance rivaling that of former Chinese leader Deng Xiaoping (鄧小平) declaring the opening of China in 1978, analysts led by Christie Ju wrote in a note.
China’s leaders pledged reforms that include allowing more private investment in state-controlled industries and loosening the one-child policy, according to a CCP statement published by Xinhua news agency on Friday last week.
Details of the policy shift lifted stocks from baby product makers to insurers. The government is liberalizing its policies in an effort to bolster an economy that’s heading for its weakest annual expansion since 1999.
The Hang Seng China Enterprises Index advanced 7 percent this week, the biggest weekly gain since December 2011.
Hong Kong’s benchmark Hang Seng Index advanced 2.9 percent, and the Shanghai Composite Index added 2.8 percent.
Japan’s TOPIX climbed 0.8 percent this week, as the yen fell below ￥100 against the US dollar for the first time since July. Bank of Japan Governor Haruhiko Kuroda said in parliament on Friday in Tokyo that the yen was not “excessively weak.” The central bank this week maintained its unprecedented monetary policy.
Other markets in Asia declined amid concern the Fed would soon taper stimulus. Minutes of the central bank’s meeting last month released this week showed policymakers expect ongoing improvement in the labor market to “warrant trimming the pace of purchases in coming months.”
Taiwan’s TAIEX lost 0.7 percent to close at 8,116.78 this week.
Shares rebounded on Friday after losing more than 1 percent the previous day, but the gains were limited by weak turnover, dealers said.
The index rose only 0.21 percent on Friday, as turnover remained below NT$70 billion (US$2.36 billion) , said Boryi Chien (簡伯儀), an assistant manager in the research department of Cathay Securities Co (國泰證券). PC vendor Acer Inc (宏碁) shares opened strong on Friday, following the company’s announcement a day earlier that its founder, Stan Shih (施振榮), would take over as chairman and interim corporate president.
After surging by the maximum daily gain of 7 percent early in the session, Acer closed 5.13 percent higher at NT$16.40 and was the most traded stock on Friday.
Financial shares led the upward trend throughout the session, with the sub-index closing 1.04 percent higher.
Cathay Financial Holding Co (國泰金控) benefited from reports that regulators are considering allowing insurers to use their funds to acquire stakes in overseas banks or insurance companies, surging 1.91 percent to NT$45.40.
Meanwhile, Australia’s S&P/ASX 200 Index slipped 1.2 percent, while New Zealand’s NZX 50 Index dropped 2 percent.
South Korea’s KOSPI was little changed, while Singapore’s Straits Times Index declined 0.9 percent.
The MSCI Asia Pacific Index traded at 13.8 times estimated earnings on Friday, compared with 16.3 on the Standard & Poor’s 500 Index and 15.1 for the STOXX Europe 600 Index, according to data compiled by Bloomberg.
In other markets on Friday:
Manila fell 0.62 percent, or 38.05 points, from Thursday to 6,084.84.
Wellington ended flat, edging down 0.36 points from Thursday to 4,818.
Mumbai also closed flat, edging down 11.66 points from Thursday to 20,217.39.