Asia report: Markets mixed, China equities jump

(Sharecast News) - Asia-Pacific markets traded mixed on Wednesday as investors digested a heavy slate of regional economic data and followed weaker cues from Wall Street, where equities fell overnight as markets assessed delayed US jobs data for November.

As Patrick Munnelly, market strategy partner at TickMill, noted, "the broader financial markets appeared directionless as a much-anticipated US jobs report came and went without much impact," with investors now shifting focus toward upcoming interest rate decisions from major central banks later in the week.

Sentiment in the region was shaped primarily by strong Japanese trade and capital spending indicators, firm gains across Chinese and South Korean equities, and weakness in Australia and New Zealand.

Tokyo benchmark edges higher after fresh data

In Japan, the Nikkei 225 edged up 0.26% to 49,512.28, supported by gains in metals and materials stocks, with Dowa Holdings rising 7.05%, Sumitomo Metal Mining up 4.77% and Mitsui Kinzoku adding 2.78%.

The broader Topix slipped 0.03% to 3,369.39.

Economic data showed Japan's trade balance swung to a much stronger-than-expected surplus of JPY 322.2bn in November, compared with forecasts for a JPY 71.2bn surplus and a JPY 226.1bn deficit in October.

Exports rose 6.1% year-on-year, beating expectations for a 4.8% increase and accelerating from a 3.6% rise previously, with shipments to the US up 8.8% despite higher tariffs.

Exports to China fell 2.4% amid diplomatic tensions, but strong growth to Vietnam and India helped offset the decline.

Imports rose 1.3%, undershooting forecasts of 2.5%, reflecting weak domestic demand amid a soft yen, rising inflation and subdued retail sentiment.

Separate data showed Japan's core machinery orders jumped 7% month-on-month in October to JPY 992.9bn, the highest since March, far exceeding expectations for a 2.3% decline, driven by a 28.8% surge in non-manufacturing orders even as manufacturing orders fell 13.3%.

On an annual basis, private-sector orders rose 12.5%, underscoring resilience in capital expenditure prospects.

China stocks rise sharply

Chinese equities advanced sharply, with the Shanghai Composite gaining 1.19% to 3,870.28 and the Shenzhen Component rising 2.4% to 13,224.51.

XiAn Qujiang Cultural Tourism Co climbed 10.04%, China Hi-Tech Group rose 10.03% and Qingdao Liqun Department Store Group advanced 10.02%.

Munnelly said that in China "the market told two very different stories," highlighting speculative enthusiasm alongside persistent structural stress.

"AI chipmaker MetaX Integrated Circuits made a spectacular debut, with its shares skyrocketing 700%," he said, adding that investors are eager to seize opportunities linked to China's push to reduce reliance on US chipmakers.

However, he also pointed to ongoing property-sector strains, noting that "property developer China Vanke was requesting an extension for a CNY 2bn bond payment grace period," underscoring continued fragility in the sector.

In Hong Kong, the Hang Seng Index added 0.92% to 25,468.78, led by China Life Insurance up 4.31%, Li Ning Co gaining 4.26% and Pop Mart International Group rising 3.44%.

South Korean markets outperformed, with the Kospi jumping 1.43% to 4,056.41.

Hanwha Galleria surged 30% after announcing it had signed a memorandum of understanding to sell FG Korea, the operator of Five Guys in South Korea, to H&Q Equity Partners, with banking sources estimating the deal at KRW 60bn to KRW 70bn, potentially delivering more than a threefold return on its initial investment.

Dongyang Express soared 29.96%, hitting the daily upper limit for an eighth consecutive session on expectations tied to the redevelopment of the Seoul Express Bus Terminal, while Daesung Industrial rose 29.89%.

Aussie, Kiwi stocks in the red

Australian equities lagged, with the S&P/ASX 200 down 0.16% at 8,585.20.

GrainCorp plunged 15.39% after warning that the sale of its Canadian unit could incur a loss of up to AUD 10m, while DroneShield fell 12.1% and Austal slid 11.48% after State Street disclosed a 5.22% stake.

In New Zealand, the S&P/NZX 50 dropped 0.96% to 13,295.91, with Synlait Milk down 4.48%, Meridian Energy off 3.04% and Ebos Group lower by 2.68%, as investors weighed data showing the country's trade deficit widened to NZD 3.78bn in the September quarter despite a rebound in services exports.

Dollar strengthens, oil prices rise on US blockade of Venezuela

In currency markets, the dollar strengthened across the region, rising 0.51% on the yen to JPY 155.51, as it added 0.25% against the Aussie to AUD 1.5115 and advanced 0.16% on the Kiwi to change hands at NZD 1.7321.

Munnelly said the dollar "slightly rebounded from its lowest levels since early October," following labour market data that left investors uncertain over the timing of the next Federal Reserve rate cut, adding that the dollar index rose 0.18% while remaining near multi-month lows.

Oil prices climbed sharply, with Brent crude futures last up 2.44% on ICE at $60.36 per barrel, and the NYMEX quote for West Texas Intermediate gaining 2.59% to $56.70.

According to Munnelly, "oil prices surged on Wednesday after US president Donald Trump announced a 'total and complete' blockade on all sanctioned oil tankers entering or leaving Venezuela."

Reporting by Josh White for Sharecast.com.