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Chinese stocks largely lagged their regional peers, trading in a flat-to-low range after data showed the country fell back into disinflation territory in October.
The trend presents more economic weakness in Asia’s largest economy, and points to more headwinds for the region as China struggles to shore up growth.
Broader Asian markets still clocked some gains on Thursday. Australia’s ASX 200 rose 0.5%, buoyed chiefly by bank stocks following strong earnings from National Australia Bank Ltd (ASX:NAB). The stock rose 1.3%, tracking an increase in its annual profit.
Japan’s Nikkei 225 was the best performer among its peers, rising 1% following strong earnings reports from Sony Corp (TYO:6758) and Nintendo Co Ltd (TYO:7974) this week. Technology conglomerate SoftBank Group Corp. (TYO:9984) and automobile maker Nissan Motor Co (TYO:7201) are set to report quarterly earnings later in the day, with the two stocks advancing before their earnings.
South Korea’s KOSPI index added 0.4%, while futures for India’s Nifty 50 index pointed to a positive open.
But most Asian stocks were still nursing losses this week, as a slew of hawkish comments from U.S. Federal Reserve officials raised doubts over whether the bank was done hiking interest rates.
Several Fed members said that sticky inflation and economic resilience will see the central bank keep rates higher for longer, and spur a potential hike in December. Their comments came before a speech by Chair Jerome Powell on Thursday.
Powell had offered few cues on monetary policy during an address on Wednesday.
Still, the prospect of higher-for-longer U.S. rates bodes poorly for Asian markets. A weak economic outlook for China also heralds more headwinds for the region.
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell about 0.1% each, while Hong Kong’s Hang Seng index slid 0.5%.
Government data showed on Thursday that both consumer and producer inflation shrank in October, putting the country in disinflation territory for the second time this year.
The inflation data also came on the heels of disappointing trade figures for October, while readings last week had shown sustained weakness in Chinese business activity through the month.
The weak October figures ramped up concerns over an economic slowdown in China, and saw investors betting on more stimulus measures from Beijing to support growth.
Still, bigger losses in Chinese stocks were held back by strength in property stocks, which rose amid reports that Beijing was considering more supportive measures for the sector.
