Asian stocks mostly declined on Friday as robust China trade data heightened concerns of an imminent interest-rate increase from Beijing.
Such expectations were firmly grounded even after the People’s Bank of China raised banks’ reserve requirement ratio a few hours after the day’s trading ended, in a move that is expected to take out liquidity from the banking system.
The Nikkei 225 Index sidled back 73.93 points, or 0.7%, to 10,212
Hong Kong’s Hang Seng Index dropped 8.89 points to 23,162.90
In Hong Kong, shares of Shangri-La Asia fell 4% as trading resumed after the firm announced a 1-for-12 rights issue to raise at least 4.69 billion Hong Kong dollars ($603 million U.S.) for repaying bank loans.
Japanese shares declined as 'a cautious mood is spreading on speculation that China will carry out a rate hike during the weekend," said Yoshinori Nagano, senior strategist at Daiwa Asset Management.
Exporters declined, with Nikon Corp. dropping 3.1%, and Sony Corp. and Advantest both shedding 1.6%.
JVC Kenwood Holdings tumbled 5% after Japan’s Financial Services Agency fined the firm approximately 840 million yen ($10 million U.S.) for attempting to raise funds with falsified documents.
CHINA
Shanghai-listed stocks ended higher as banks and insurers rose on hopes an interest-rate increase would enhance their profitability, while Indian shares snapped out of a three-day losing streak on bargain buying.
Shanghai’s CSI 300 Index moved forward 38.61 points, or 1.2%, to 3,161.98
Economists at Capital Economics said the PBOC’s reserve-requirement-ratio increase Friday takes the average RRR for Chinese banks to 18%.
Fresh data released on Friday only bolstered the case: China’s imports and exports both hit records in November, with the trade surplus narrowing to $22.9 billion U.S. from $27.15 billion U.S. in October.
In Shanghai, Ping An Insurance climbed 2.9% and China Life Insurance rose 1.9%, while China Construction Bank added 1.1% amid hopes an interest-rate increase would lift insurers’ investment income and banks’ interest-rate margins.
Chinese property stocks underperformed on mainland bourses, with Poly Real Estate Group dropping 0.7% and China Vanke losing 0.9%.
In other markets
Singapore’s Straits Times Index let go of 24.78 points, or 0.8%, to 3,185.42
Korea’s Kospi Index inched back 2.82 points, or 0.1%, to 1,986.14
Taiwan’s Taiex Index skidded 35.01 points, or 0.4%, to 8,718.83
New Zealand’s NZX 50 Index surrendered 7.64 points, or 0.2%, to 3,272.92
Australia’s S&P/ASX 200 Index added 4.60 points, or 0.1%, to 4,745.90
