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Asian Shares End Mixed, Chinese Stocks Rally On Trade Talk Hopes

stockmarkets jan04 04jan19 lt

Asian stocks ended mixed on Friday, with solid services sector data and hopes of trade talks lifting Chinese stocks sharply higher, while Japanese shares succumbed to heavy selling as trading resumed after a long week of holidays.

China's Shanghai Composite Index jumped 50.51 points or 2.1 percent to 2,514.87 after China's Commerce Ministry said China and the U.S. would hold vice ministerial level trade talks in Beijing on January 7th and 8th. Hong Kong's Hang Seng Index surged up 2.2 percent to 25,626.03.

Slowing growth in China is having an impact on Apple and other American companies, but sales should recover once Washington strikes a trade deal with Beijing, a senior White House adviser said.

On the data front, growth in China's services sector edged higher in December, a private survey showed, helping ease investor concerns over growth. The Caixin/Markit services PMI rose to a six-month high of 53.9 in December from 53.8 in November.

Elsewhere, the private sector in Hong Kong continued to contract in December, although at a slightly slower rate, the latest PMI from Nikkei showed.

Japanese shares fell sharply in the first trading session of 2019. The Nikkei 225 Index tumbled 452.81 points or 2.3 percent to finish at 19,561.96 on concerns over the yen's latest ascent. The broader Topix closed 1.5 percent lower at 1,471.16 as local bourses caught up with other global markets after the New Year's break.

Tech stocks succumbed to heavy selling pressure, with Advantest plunging 4.1 percent and Tokyo Electron losing 5 percent on the heels of a revenue warning from Apple. Apple suppliers Taiyo Yuden and Murata Manufacturing plummeted around 10 percent. The yen's recent surge pulled down exporters' shares, with Canon, Panasonic and Sony losing around 3 percent.

On the economic front, the latest survey from Nikkei revealed that the manufacturing sector in Japan expanded at faster rate in December, with a PMI score of 52.6. That's up from the 15-month low of 52.2 in November.

Australian markets recouped early losses to finish off their day's lows. The benchmark S&P/ASX 200 Index dropped 14.00 points or 0.3 percent to 5,619.40, while the broader All Ordinaries index ended down 17.60 points or 0.3 percent at 5,677.

The big four banks ended narrowly mixed, while insurer Suncorp Group lost 3 percent after saying it has so far received 24,800 claims in relation to December's wild Sydney storms. Rivals Insurance Australia Group and QBE Insurance Group ended down 0.9 percent and half a percent, respectively.

Mining giant BHP shed 0.9 percent, while smaller rival Fortescue Metals Group rallied 2.4 percent. Gold miners Evolution, Newcrest Mining and St Barbara jumped 2-5 percent after gold prices rose to their highest level since mid-June overnight.

Energy stocks Woodside Petroleum and Santos rose over 1 percent after oil prices ended higher for a fourth straight session on Thursday.

Seoul stocks closed sharply higher as investors cheered media reports that the U.S. and China will hold working talks in Beijing next week in a bid to defuse trade tensions. The benchmark Kospi climbed 16.55 points or 0.8 percent to 2,010.25 after hitting a two-year low earlier in the day on global growth worries.

New Zealand shares finished marginally higher, with the benchmark S&P/NZX 50 Index inching up 11.39 points or 0.1 percent to 8,743.76. Index heavyweight a2 Milk Company hit its lowest level in two weeks before finishing down 2.3 percent.

Singapore's Straits Times Index jumped 1.5 percent after a Nikkei survey showed the country's private sector continued to expand in December, albeit at a slower rate. India's Sensex rose 0.5 percent.

U.S. stocks plunged overnight as weak manufacturing data around the world and downwardly revised guidance from Apple stirred concerns about the economic outlook. The Dow lost 2.8 percent, the tech-heavy Nasdaq Composite gave up 3 percent and the S&P 500 declined 2.5 percent.

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