Asia report: Markets mixed as China consumer inflation misses
By Josh White
Date: Friday 09 Jul 2021
(Sharecast News) - Most markets in Asia closed their Friday sessions in negative territory, as investors digested the latest inflation data out of China, while Japanese authorities looked set to ban all spectators from the upcoming Summer Olympics in Tokyo amid a rise in Covid-19 infections.
In Japan, the Nikkei 225 was down 0.63% at 27,940.42, as the yen weakened 0.2% against the dollar to last trade at JPY 109.94.
Of the major components on the benchmark index, automation specialist Fanuc was down 2.84%, fashion firm Fast Retailing was off 0.28%, and technology conglomerate SoftBank Group lost 0.72%.
The broader Topix index was off 0.41% by the end of trading in Tokyo, settling at 1,912.38.
Organisers of the upcoming Olympic Games in Tokyo, already postponed from 2020 due to the pandemic, were set to announce a ban on spectators from all events, it was revealed earlier in the day.
That was the result of authorities in the Tokyo megalopolis implementing a fresh state of emergency amid a rise in Covid-19 cases, as Japan's vaccination rates languished among its OECD peers.
"Worries about the rise of the Delta variant globally are also a factor - Tokyo's decision to ban spectators was taken as a warning that Covid the pandemic is far from over," said Markets.com chief market analyst Neil Wilson.
"The biggest worry seems in this sense that we have hit peak growth - and hit peak expectations a couple months back as evidenced by the top in the commodity market."
On the mainland, the Shanghai Composite was off 0.04% at 3,524.09, and the smaller, technology-heavy Shenzhen Composite eked out gains of 0.07% to 2,436.84.
Fresh data out of Beijing showed China's consumer price index rising 1.1% year-on-year in June, falling below expectations for a 1.3% rise set by a Reuters poll of analysts.
"We got this one wrong, thanks mainly to the non-core items," said Pantheon Macroeconomics chief Asia economist Freya Beamish on the expectation miss.
"Spot pork prices pointed to a switch back to food deflation, but we underestimated the swing.
"At the same time, energy inflation likely contributed 0.7 percentage points to the headline in June, up from 0.5 points in May, but a less substantial pick-up than we had anticipated."
The producer price index, meanwhile, advanced 8.8%, meeting Reuters-polled expectations, but falling slightly from the 9% inflation reported in May.
"We still think price rises will pick up again in the current month, before slowing - the CRB commodities index leads by one month," Freya Beamish added.
"This would mean PPI inflation hasn't yet reached its peak.
"In any case, we think it will take a while to come back down."
South Korea's Kospi fell 1.07% to 3,217.95, while the Hang Seng Index in Hong Kong added 0.7% to 27,344.54.
Authorities in the Korean capital were also grappling with fresh outbreaks of the coronavirus, with Seoul being placed under 'level 4' - the most rigid set of social distancing rules in the peninsular country - according to the Yonhap news agency.
The blue-chip technology stocks were lower in Seoul, with Samsung Electronics down 0.63%, and SK Hynix losing 1.65%.
Oil prices were higher as the region entered the weekend, with Brent crude last up 0.86% at $74.46, and West Texas Intermediate rising 1.11% to $73.75.
In Australia, the S&P/ASX 200 was down 0.93% at 7,273.30, and across the Tasman Sea, New Zealand's S&P/NZX 50 lost 0.49% to 12,690.35.
The down under dollars were a mixed picture against the greenback, with the Aussie last 0.61% weaker at AUD 1.3447, while the Kiwi strengthened 0.26% to NZD 1.4353.
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