Asian stocks diverged on Monday, with equity markets in China and Japan scaling their highest levels in more than two months while other regional bourses wobbled on the back of below-view trade figures from China over the weekend.
October exports fell 6.9 percent from a year ago, dropping for a fourth month, while imports slipped 18.8 percent, leaving China with a record high trade surplus of $61.64 billion, the General Administration of Customs said on Sunday.
"We believe the underlying trend in trade growth continues to weaken, which reflects persistent weakness in both global demand and fixed asset investment in China. Despite the hope of a potential turnaround in property sector and better fiscal support for infrastructure in the fourth quarter, the trade data suggest investment momentum probably has yet to pick up. The smaller drop in import prices also serve as a good reminder that terms of trade gains will likely narrow going into 2016, as commodity demand stabilizes at low levels," a note from Bank Of America Merrill Lynch issued Monday said.
Wall Street handed over a mixed lead from Friday; the Nasdaq Composite and Dow Jones Industrial Average edged up 0.4 and 0.3 percent respectively, while the finished flat after a better-than-expected October jobs report raised the likelihood of a December rate hike.
According to figures released by the Bureau of Labor Statistics on Friday, nonfarm payrolls grew 271,000 in October, registering a sharp jump from weak August and September numbers. The headline unemployment rate declined to 5.0 percent, declining even as the civilian labor force increased by 313,000.
Mainland stocks rally
Hefty buy orders for blue chips supported China's key Shanghai Composite index to its highest level since August 20, following news that China's securities regulator plan to resume initial public offerings (IPO) after a near four-month halt.
PetroChina, which has the heaviest weighting of any Chinese company in the Shanghai bourse, closed up 1.5 percent.
On the other hand, securities firms traded mixed after a stellar run-up in the past two trading sessions. Haitong Securities and Huatai Securities fell 3.2 percent each. Founder Securities climbed up by the daily maximum allowable of 10 percent and Everbright Securities tacked on 4.6 percent.
In Hong Kong, China International Capital Corp (CICC) was off to a strong start after raising $811 million from its IPO. Shares of the investment bank closed up 7.2 percent to HK$11.02 in its market debut, above the IPO price of HK$10.28 but slightly off its intra-day high of HK$11.44.
Mainland brokerages in Hong Kong outperformed as well, with Citic Securities, China Galaxy Securities and Haitong Securities up between 0.6 and 1.6 percent. The broader Hang Seng index dropped 0.7 percent.
Nikkei rises 2%
Banking shares soared following a Nikkei business daily report that Japan's biggest banks plan to announce a reduction target for equities classified as "strategic." Sumitomo Mitsui Financial Group and Mitsubishi UFJ Financial Group piled on more than 4 percent each, while Mizuho Financial closed up 3.1 percent.
Among exporters, Nikon powered up 2.9 percent after delivering a 11 percent jump in its April-September operating profit, beating guidance by 6.5 billion yen.
Air bag maker Takata slipped 0.5 percent at the close, surrendering early gains as much as 12 percent, after heavy selling in the previous trading sessions.
Toshiba slid 7.5 percent after the laptops-to-nuclear power conglomerate said it swung to an operating loss of 79.5 billion yen ($645.66 million) in the three months through September, from a 90.2 billion yen profit a year earlier. The company also said it has sued five former executives over mismanagement that led to a $1.3 billion hole in its accounts.
ASX loses 1.8%
Australia's index finished at its lowest level since October 5, as domestic factors dampened trading sentiment, according to IG's chief market strategist Chris Weston.
"I would certainly put [Monday's plunge] down to domestic factors, rather than genuine concern about the Fed starting to normalize policy. There have been many questions asked about domestic companies with BHP Billiton as a key one and the impact on top line growth, as well as the progressive dividend policy in the wake of the tragedy in Brazil. There also seems to be growing concerns around capital city house prices, notably in the wake of another drop in the Sydney and Melbourne auction clearance rates. Real estate investment trusts and banks have found good sellers," the Melbourne-based strategist wrote in a note released on Monday.
Market bellwether BHP Billiton plunged 5.6 percent, tracking a 3.6 percent slide in its U.S. ADRs after a dam at an iron ore mine in Brazil that it partly owns burst last Thursday.
Gold prices lingering near 3-month lows sparked a sell-off among related counters; Evolution Mining and Newcrest Mining plummeted 6.9 and 5.5 percent respectively, while Woodside Petroleum and Oil Search fell 2.5 and 1.1 percent respectively, on the back of a 2 percent drop in crude oil prices last Friday.
Shares of Santos were placed under a trading halt following news that the oil and gas producer plans to sell a 35 percent stake in the Kipper gas field in southeastern Australia to Japan's Mitsui & Co. and raise 3 billion Australian dollars ($2.1 billion) through two share sales on Monday. The Adelaide-based company also said it would raise a further A$500 million by issuing around 73.5 million new shares to a unit of Chinese private-equity firm Hony Capital.
In the banking sector, Australia and New Zealand Banking led declines with a drop of 2.4 percent, while Westpac, Commonwealth Bank of Australia and National Australia Bank closed down between 1.3 and 2.4 percent.
Kospi drops 0.8%
South Korea's Kospi index settled at a two-and-a-half-week trough, with oil refining and chemical counters struggling amid lower oil prices.
By contrast, Hanmi Pharmaceutical charged up 16 percent, adding to Friday's 30 percent rally, as investors continue to cheer news that the company has entered into a licensing deal with French drugmaker Sanofi last week.
Multi-screen cinema chain CJ GGV tacked on 5.6 percent after announcing upbeat third-quarter earnings last Friday.
JKSE tanks 1.5%
The Indonesian currency fell around 0.7 percent against a solidly-rising U.S. dollar, which got a boost from last Friday's robust U.S. employment data.