MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.8 percent, while Japan’s Nikkei stock index shed 1.8 percent.
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In Hong Kong, Hang Seng added 2.2 percent, to 22,925.64 points, while the Hong Kong China Enterprises Index gained 2.8 percent, to 10,619.63.
On Wall Street, major stock indexes were little changed but utility stocks, often traded in lieu of bonds due to their perceived lower risk and high dividends, outperformed with a 0.9 percent advance by the S&P 500 utilities index.
An unexpectedly weak U.S.jobs report for September had led many investors to speculate that the Fed will not deliver its first hike since 2006 until 2016.
Asian shares tumbled on data showing that China’s consumer price index (CPI) inflation rate rose 1.6 year-on-year in September. Producer prices fell 5.9 per cent from a year ago, in line with expectations and extending their downtrend to a 43rd straight month.
“It was quite disappointing”, said Angus Nicholson, a market analyst at brokerage IG. Banks outperformed, with Commonwealth, NAB and Westpac falling around half a percent each, while ANZ rose 0.6%. Both factors helped offset worries earlier this week about China’s ability to meet its year-end growth target, after weak trade and inflation data.
Shares in Shanghai turned positive in the late morning, as investors weighed the likelihood of further stimulus from Beijing to support the economy.
The People’s Bank of China set the midpoint rate at 6.3406 per dollar prior to the market open, firmer than the previous fix of 6.3493 and the previous day’s closing quote of 6.3453.
“Given the weakness in the economy, the expectations are quite strong about a cut in interest rates and reserve- requirement ratios”, said Zhang Haidong, chief strategist at Jinkuang Investment Management in Shanghai, who’s adding to his holdings.
The Communist Party of China Central Committee will hold a key meeting during October to deliberate on an economic and social development plans for China over the next five years, the official Xinhua News Agency reported.
The news, which circulated among traders in the afternoon, “dampens a few of the speculation yesterday about more aggressive easing”, said David Welch, managing director at brokerage Reorient Group.
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The dollar slipped against most rivals Monday, with China’s currency rising to its best level against the greenback since Beijing’s surprise devaluation of the yuan in August. “Regional indices are likely to come under more pressure, although Asian currencies may be cushioned given a relatively flat US dollar”, he said in a commentary. While the gains follow authorities’ decision to ease currency policy, the moves weren’t as aggressive as expected and followed improving growth data. The city-state uses a managed exchange rate-rather than interest rates-as its main monetary policy tool. Dabur India (down 2.64%), Godrej Consumer Products (down 2.54%), Britannia Industries (down 2.09%), Nestle India (down 2.33%), Tata Global Beverages (down 1.93%), Bajaj Corp (down 2.02%), Marico (down 0.97%), Jyothy Laboratories (down 1.03%), GlaxoSmithkline Consumer Healthcare (down 0.25%) and Colgate Palmolive (India) (down 0.36%) edged lower.
