(Sharecast News) - Asia-Pacific equities delivered a mixed performance on Monday, with South Korea's Kospi index hitting a record high while Australian and New Zealand shares slipped and Chinese markets traded narrowly mixed ahead of key economic data releases from Beijing.
Japanese markets were closed for the Respect for the Aged Day holiday.
Stephen Innes at SPI Asset Management said the session opened with markets "like a ship steady at anchor, drifting directionless but not without purpose, as traders brace for a storm of central bank meetings that will shape the market's compass heading."
He noted that "the dollar opened the Asian week steady, like a tide neither advancing nor retreating, waiting for Powell's hand on the throttle to decide which way the current will break."
Korean bourse jumps on mixed day for markets
South Korea's Kospi index rose in early trade to a record high, marking its 10th consecutive session of gains, after Finance Minister Koo Yun-cheol said the government would scrap plans to raise taxes on stock investments.
The Kospi 100 climbed 0.38% to close at 3,485.48, led by sharp gains for Hyundai Heavy Industries, up 10.64%, Hanjinkal, up 7.86%, and Samsung C&T, up 7.05%.
In China, the Shanghai Composite fell 0.26% to 3,860.50, weighed by losses for China Hi-Tech Group, down 7.23%, Beijing Tricolor Technology, down 7.16%, and Jinko Power Technology, down 5.66%.
The Shenzhen Component gained 0.63% to 13,005.77.
Hong Kong's Hang Seng Index edged up 0.22% to 26,446.56, supported by gains for WuXi Biologics, which rose 6.47%, Li Auto, up 4.56%, and Nongfu Spring, up 4.11%.
Australia's S&P/ASX 200 slipped 0.13% to 8,853.00 at the open, dragged lower by Evolution Mining, down 5.25%, Washington H Soul Pattinson, down 5.15%, and Brickworks, down 4.9%.
Across the Tasman Sea, New Zealand's S&P/NZX 50 eased 0.15% to 13,208.31, with Synlait Milk down 4.03%, Chorus down 3.44% and Investore Property down 2.15%.
In currency markets, the dollar eased 0.2% against the yen to trade at JPY 147.39, while it lost 0.13% on the Aussie to AUD 1.5021, and retreated 0.11% from the Kiwi to change hands at NZD 1.6776.
Brent crude futures were last up 0.3% on ICE at $67.19 per barrel, while the NYMEX quote for West Texas Intermediate gained 0.38% to $62.93.
Innes said September "feels less like a polite policy roundtable and more like the colosseum floor.
"Powell will stride out under the brightest torchlight, but Bailey's Bank of England and Ueda's Bank of Japan are also entering the pit, and their movements could change the flow of the crowd's money in ways traders can't ignore."
He warned that "when different gladiators strike in the same season, liquidity shifts, currencies reprice, and bond markets tremble."
Investors also kept a close eye on talks between US and Chinese officials in Madrid, where delegations led by US Treasury secretary Scott Bessent and US trade representative Jamieson Greer met Chinese vice premier He Lifeng and trade negotiator Li Chenggang to discuss national security, economic and trade issues, including US tariffs and the deadline for divesting the Chinese short video app TikTok.
Innes described Madrid as "the new fault line in US-China rivalry," saying "the world's two economic heavyweights circled each other in Madrid, not with fists but with trade ledgers and TikTok's code dangling as bait.
"Markets see the outline: tariffs sharpened, sanctions dangled, chips weaponized, social media apps turned into hostages."
Trio of Chinese data points undershoot expectations
A slate of key economic indicators from China undershot expectations on Monday, fuelling speculation that Beijing may introduce further stimulus measures to support growth.
Official data from the National Bureau of Statistics showed industrial production rose 5.2% year-on-year in August, down from 5.7% in July and below the 5.8% forecast.
It marked the slowest annual pace in 12 months, with declines evident in manufacturing and energy utilities output.
Retail sales climbed 3.4% to CNY 3.97trn (410bn), easing from 3.7% in July and missing expectations for 3.8%, while fixed asset investment over the year to August grew just 0.5%, sharply down from 1.6% in July and well below the 1.4% projected.
The weakness was driven by a steep 12.9% fall in real estate investment, though excluding property activity, fixed asset investment would have increased 4.2%.
Stephen Innes said "the Chinese economy is moving more like a stalled growth engine than even an old handcar trolley - each pump eventually produces less forward motion.
"August's data were thin gruel: retail sales crawled at 3.4%, factory output eased to 5.2%, and fixed-asset investment slipped to the weakest pace since the pandemic years.
"What should be the engine pulling the Asia and global train now looks more like a machine stuck in low gear, unable to build the momentum to climb the next hill."
He added that "markets, as always, run the bad-news-is-good-news algorithm.
"Weaker prints push traders to mark down rates, yields ease, equities hold, and the logic becomes circular: the softer the data, the bigger the expected policy put.
"Like a market leaning on central-bank bids, the game works until it doesn't.
"Near term, China's slowdown is still a tailwind for risk via policy easing, helping EM assets ride the dovish tide.
"But structurally, the fragility is clear: if the one economy the IMF counts on for incremental growth keeps losing depth, the 'policy floor' may stop holding."
Kathleen Brooks, research director at XTB, said the figures signalled a "broad economic slowdown" in China.
"This data is unlikely to deter another leg higher for stocks, since it could spur the Chinese government on to add more stimulus to prop up the economy, which is risk positive," she said.
Reporting by Josh White for Sharecast.com.
6.26 (0.07%)
21.19
0.00