Asia report: Markets lower across the board as China data disappoints

(Sharecast News) - Asia-Pacific equities fell sharply on Friday, tracking a broad selloff on Wall Street as pressure on technology shares deepened and expectations for a December Federal Reserve rate cut faded.

Regional sentiment weakened on China's release of retail sales, industrial output and fixed-asset investment data for October, which showed further signs of strain, as expected.

Patrick Munnelly at TickMill said the renewed slump "followed Wall Street's abrupt end to a four-day winning streak, as US markets experienced their steepest single-day drop since April's tariff-related turmoil."

Overnight in the US, all three major averages suffered their worst session since 10 October. The Dow Jones Industrial Average dropped 1.65% while the S&P 500 fell 1.66%.

The Nasdaq Composite slid 2.29% to 22,870.36 as investors continued to unwind positions in major technology names tied to the artificial intelligence trade.

Disney tumbled nearly 8% after mixed quarterly results.

Munnelly noted that "hawkish remarks from Federal Reserve officials, combined with anticipation of upcoming economic data, spurred traders to shed riskier assets, ranging from tech stocks to cryptocurrencies."

He added that "with the optimism surrounding the government shutdown's resolution already baked into the market, concerns over lofty valuations reemerged," driving a shift toward more defensive sectors.

The pullback followed comments from senior Fed officials, including Boston Fed President Susan Collins, who said it may be appropriate to keep rates unchanged "for some time," prompting traders to scale back expectations for a quarter-point cut next month to roughly even odds.

Munnelly said the S&P 500's performance "marked its third drop of over 1% in just two weeks, a stark contrast to the previous three months."

Tokyo leads declines, China data disappoints

Japan led regional declines - the Nikkei 225 dropped 1.77% to 50,376.53 as Ebara Corporation fell 13.58%, Furukawa Electric lost 9.47% and Rakuten Group slipped 9.43%.

SoftBank plunged nearly 9% in early trading following confirmation that it had sold its entire stake in Nvidia, and closed 6.57% lower.

The Topix eased 0.07% to 3,359.81.

Munnelly said Japan's market retreat aligned with broader regional moves, noting that "Japan's Nikkei index slid 2%," reflecting the depth of the global tech-driven selloff.

Chinese markets also weakened - the Shanghai Composite fell 0.97% to 3,990.49, with Beijing Sanyuan Foods down 10.03% and Greattown Holdings and GigaDevice Semiconductor Beijing each falling 9.55%.

The Shenzhen Component slid 1.93% to 13,216.03.

Fresh data showed China's slowdown deepened in October, with fixed-asset investment down 1.7% in the first 10 months, the steepest contraction since 2020, and a single-month decline of 11.4% year-on-year.

Industrial output growth slowed to 4.9%, while retail sales rose 2.9%, their weakest pace this year.

Property investment continued to shrink, falling 14.7% in the year to October, and new home prices dropped 0.5% month-on-month.

Munnelly said the disappointing figures "quickly erased a brief rally in equity markets," adding that "credit growth for October was CNY 815bn, the lowest since 2015," with household borrowing declining and corporate lending flat.

He warned that despite weaker financing flows, "debt is rising faster than the economy, now at 314% of GDP."

Hong Kong's Hang Seng Index fell 1.85% to 26,572.46, dragged lower by Baidu, down 7.21%, JD.com, off 6.03%, and Alibaba Group, down 4.38%.

In South Korea, the Kospi sank 3.81% to 4,011.57 as Suheung Capsule tumbled 20.53%, Kolon Mobility Group dropped 13.8% and SK Square fell 10.05%.

Munnelly said South Korean markets "saw a steep plunge ... with losses intensifying throughout the day" as risk aversion accelerated.

The South Korean won strengthened after finance minister Koo Yun-cheol said FX authorities would consult major market participants on measures to stabilise the currency.

Bourses red down under as NZ manufacturing data improves

Australia's S&P/ASX 200 fell 1.36% to 8,634.50, weighed down by Megaport, which slid 9.62%, Hub24, down 7.98%, and Life360, off 6.69%.

Across the Tasman Sea, New Zealand's S&P/NZX 50 declined 0.98% to 13,464.46 as Eroad dropped 7.98%, Vista Group International fell 4.44% and Sky Network Television lost 3.65%.

New Zealand's manufacturing sector showed modest improvement, with the BusinessNZ PMI rising to 51.4 in October, its fourth straight month above the 50 expansion threshold.

BNZ senior economist Doug Steel said the increase from September's 50.1 "isn't large, but it has moved the right way."

Regional currencies mixed as oil prices jump

In currency markets, the dollar edged up to JPY 154.64 against the yen, rose to AUD 1.5370 against the Australian dollar, and eased to NZD 1.7636 versus the New Zealand dollar.

Oil prices strengthened, with Brent crude futures last up 2.36% on ICE at $64.50 per barrel, and the NYMEX quote for West Texas Intermediate rising 2.71% to $60.28.

Reporting by Josh White for Sharecast.com.