Asian Stocks Mixed, Impact From Latest Chinese Rule Tightening Continues

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By Gina Lee

AiVIF.com – Asia Pacific stocks were mixed on Friday morning, with investors weighing the impact of China’s latest regulatory tightening alongside the prospect of reduced U.S. Federal Reserve stimulus.

China’s Shanghai Composite was up 0.21% by 9:54 PM ET (1:54 AM GMT) while the Shenzhen Component was down 0.23%. Concerns that the impact from China Evergrande Group's (HK:3333) debt crisis will spread continue to grow, and regulatory tightening for sectors from technology to gambling continues to hurt U.S.-listed Chinese shares and casino operators with exposure to Macau.

Hong Kong’s Hang Seng Index edged up 0.15%.

Japan’s Nikkei 225 gained 0.54% while South Korea’s KOSPI edged down 0.11%.

In Australia, the ASX 200 fell 0.85%.

U.S. shares ended the previous session mostly lower after a volatile session ahead of the quarterly expiration of options and futures later in the day.

Meanwhile, data released on Thursday showed that U.S. core retail sales grew 1.8% month-on-month and retail sales grew 0.7% month-on-month in August. September's Philadelphia Federal Reserve Manufacturing Index was 30.7, while the Philly Fed Employment was at 26.3.

The data also showed that initial jobless claims increased to 332,000 over the past week.

The Michigan Consumer Expectations and Michigan Consumer Sentiment indexes for September will be released later in the day.

Global shares are set for a second weekly drop, as the COVID-19 Delta variant continues to impact economic recovery. Continuous inflationary pressure and the developments in China also applied pressure. The Fed’s policy decision, due to be handed down next week, could be another source of volatility. It remains to be seen whether the decision will provide any clues to the Fed’s timeline to begin asset tapering and hike interest rates.

“Investors just should be prepared for the fact that returns are much more likely to be muted over the next five years than what we’ve really benefited and enjoyed over the last five,” Northern Trust (NASDAQ:NTRS) Bank chief investment strategist Jim McDonald told Bloomberg.

That outlook incorporates the prospect of lower valuations over time for Chinese firms facing more government involvement, he added.