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Asian stocks close lower after China data misses forecasts; ASX falls 0.9%

Key Points
  • Asian shares closed lower on Tuesday
  • Australian markets fell, led by losses in resource and financial stocks
  • Chinese industrial production, retail sales and fixed asset investment missed forecasts
  • SoftBank said it was considering investing in Uber, but that no agreement had been made

Asian equities closed lower on Tuesday following a lackluster session on Wall Street that saw major indexes close just above the flat line. Investors also digested the release of a slew of Chinese economic data points that came in below forecasts.

Markets on the move 

The Nikkei 225 erased early losses to close flat at 22,380.01 as gains in most tech names balanced losses in trading houses and energy-related stocks. Shares of Sharp and Toshiba closed up 2.91 percent and 4.66 percent, respectively.

Across the Korean Strait, the Kospi lost 0.15 percent to finish at 2,526.64 as automakers and cosmetics names pared gains made in the last session. Brokerages also trended lower. Despite the benchmark index edging lower, the tech-heavy Kosdaq soared 2.03 percent by the end of the session.

Down Under, the S&P/ASX 200 fell 0.88 percent to finish the session at 5,968.75 as declines in resource stocks and financials dragged on the broader market: National Australia Bank closed down 1.44 percent and Rio Tinto lost 0.96 percent. The energy sector was also in the red, with Santos falling 2.18 percent on the day as oil edged lower. Following news that Shell Energy Holdings Australia sold its 3.5 billion Australian dollar ($2.7 billion) stake in Woodside, shares of the latter closed down 3.23 percent.

Of note, business conditions in Australia rose to a record high in October as profits improved, according to National Australia Bank's monthly survey.

Greater China markets traded mixed. The was off 0.06 percent by 3:15 p.m. HK/SIN while mainland markets closed lower following the release of a slew of economic data released in the morning. The declined 0.52 percent to end at 3,429.97 and the Shenzhen Composite lost 0.95 percent to close at 2,025.78.

Data on Tuesday showed that the country's fixed asset investment growth between January and October slowed to 7.3 percent, below the 7.4 percent forecast in a Reuters poll. Retail sales for October rose 10 percent compared to one year ago, against the 10.4 percent projected in a Reuters survey. Industrial output, for its part, increased 6.2 percent that month, a touch below the 6.3 percent forecast.

Asia-Pacific Market Indexes Chart

U.S. stocks finished their Monday session a touch higher as investors digested dealmaking headlines but worried about the progress on tax reforms. The Dow Jones industrial average edged up 0.07 percent, or 17.49 points, to close at 23,439.70 while shares of General Electric tumbled 7.17 percent after it said it would cut dividend in half.

The lead up

Proposed tax cuts were in focus stateside, with President Donald Trump joining the fray and calling for additional amendments in the Republican plan. In a tweet, Trump suggested repealing an Affordable Care Act provision that requires most Americans to purchase insurance. Doing so would allow the top individual income tax rate to be cut to 35 percent with "all the rest going to middle income cuts," Trump added.

Trump's tweet added more complexity to plans to reform the U.S. tax system. There are currently two tax plans drawn up by House and Senate Republicans which have to be passed by the respective chambers before eventually being reconciled.

Federal Reserve Chair Janet Yellen, European Central Bank President Mario Draghi and Bank of Japan Governor Haruhiko Kuroda are among those scheduled to attend a central banking conference in Frankfurt on Tuesday. Investors are likely to take note of the messaging coming out of that conference.

Corporate news 

Japanese telco SoftBank said Tuesday it was weighing investing in Uber although no agreements had been made at the present time. SoftBank told CNBC in an earlier statement that it was interested in the ride-hailing company, but that the final agreement would depend on "tender price and a minimum percentage shareholding for SoftBank." The company's shares closed down 1.51 percent.

Japan's Mizuho Financial Group on Monday said net profit for the quarter ending in September fell 12 percent to come in at 198.4 billion yen ($1.75 billion), Reuters reported. Ultra-low interest rates have hurt returns for Japan's banks. Mizuho stock ended the session down 1.04 percent, underperforming other Japanese financials.

In Singapore, shares of embattled commodity trader Noble Group sank 6.82 percent by 3:14 p.m. HK/SIN after Co-Chief Executive Officer Jeffrey Frase's resignation was accepted by the board on Monday. Shares of the company touched their lowest levels since 1999 during the trading day, Reuters said.

Elsewhere, Morgan Stanley CEO James Gorman said the bank would be looking to expanding its stake in its investment bank joint venture on the Chinese mainland to a controlling 51 percent, the South China Morning Post reported. The move came after China announced last week it would be easing foreign ownership rules on financial sector joint ventures.

Meanwhile, e-commerce company on Monday announced net earnings of 1 billion yuan ($150.6 million) in the quarter ending September. That was above the 213 million yuan loss estimated in a Reuters survey.

Watching the dollar 

Sterling continued to struggle on the back of negative weekend headlines about U.K. Prime Minister Theresa May's leadership and as Brexit negotiations only inched forward. The pound traded at $1.3098 at 2:47 p.m. HK/SIN after touching as low as $1.3060 on Monday.

"Suffice to say that in the absence of progress within U.K. political circles this week and next toward offering up a higher Brexit divorce bill, sterling could be down another 5 percent or more by month end," Ray Attrill, head of FX strategy at National Australia Bank, said in a note.

"If instead May does somehow manage to pull a proverbial rabbit out of the hat, it will be 5 percent or more stronger. The pound will be a very sharp toy in the coming few weeks."

Meanwhile, the dollar index, which tracks the dollar against a basket of six currencies, was mostly steady at 94.507 at 2:47 p.m. HK/SIN. The U.S. currency was little changed against the yen at 113.64, near the 113.62 seen in the last session.

The commodities trade 

Oil prices slid despite optimism about OPEC-led output cuts as U.S. production rose. U.S. crude futures shed 0.35 percent to trade at $56.56 a barrel and Brent crude lost 0.46 percent to trade at $62.87.

— CNBC's Jacob Pramuk and Deirdre Bosa contributed to this report.