Asia Markets

Asia Pacific markets mostly tumble as China's growth weakens more than expected

Key Points
  • Mainland Chinese markets fell after the release of China's third-quarter growth data.
  • China released third-quarter GDP figures on Friday showing the economy grew 6.0% from a year ago — weaker than analyst expectations of 6.1%.
  • Markets in Europe overnight had rallied on news that a new draft Brexit deal has been reached, with the sterling jumping to a five-month high. But those hopes were soon dampened — with the sterling giving up gains.

Asia Pacific markets mostly declined on Friday by the close, as China released worse-than-expected gross domestic product figures, impacted by Beijing's protracted trade conflict with the U.S.

Mainland Chinese markets tumbled after the release of the data. The Shanghai composite fell 1.32% to close at 2,938.14, while the Shenzhen composite was down 1.17% to 1,616.72, and the Shenzhen component declined 1.16% to 9,533.50.

China released third-quarter GDP figures on Friday showing the economy grew 6.0% from a year ago — weaker than analyst expectations for 6.1%.

"Unchecked, the US-China trade conflict is set to sink growth well below 6%. Especially given that structurally, growth is set to moderate to 5% in the next 5-10 years," Mizuho Bank's Vishnu Varathan, head of economics and strategy, wrote in a note sent before the data was out.

The country may now have to escalate stimulus in the next one to two quarters if it wants to set a growth target of between 5.5% and 6% for next year, Macquarie analysts wrote in a note on Friday afternoon.

Beijing's protracted trade dispute with the U.S. has weighed on its economy, with growth slowing to 6.2% in the last quarter — its slowest pace in 27 years. China had emphasized Thursday that the U.S. must remove tariffs in order for the two countries to reach a final agreement on trade.

Over in Hong Kong, the Hang Seng index fell 0.72% in the afternoon. Property developers in Hong Kong pared some gains they made the day before. Shares of New World Development dropped 1.07%, Henderson Land fell 1.68% and CK Asset tumbled 0.46%.

Other Asia Pacific markets

Australia's S&P/ASX 200 slipped 0.52% to close at 6,649.70. Its so-called Big Four banks pared earlier losses by the close, with shares of National Australia Bank declining 0.35%, Commonwealth Bank lost 0.59%, ANZ slid 0.68%, and Westpac shares was down 0.83%.

Over in Japan, the Nikkei 225 bucked the trend to add 0.18% to 22,492.68, while South Korea's Kospi slipped 0.83% to close at 2,060.69.

Overall, MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.30%.

In company news, Apple supplier TSMC forecast a nearly 10% rise in fourth-quarter revenue, with strong demand for faster smartphone chips and phones on the back of better-than-expected 5G smartphone growth momentum, its CEO said in an earnings briefing, according to a Reuters report. The company reported a 12.6% rise in third-quarter revenue on Thursday.

TSMC shares were down 0.17% on Friday.

Saudi state oil giant Saudi Aramco is said to be delaying its planned listing, as it wants to update investors with its latest earnings following the Sept. 14 attacks which knocked out half its crude output, according to a Reuters report, citing sources.

Brexit

Meanwhile, markets in Europe overnight had rallied on news that a new draft Brexit deal has been reached, with the sterling jumping to a five-month high. But those hopes were soon dampened — with the sterling giving up gains — by U.K. opposition parties who voiced their concerns.

The British pound was last at 1.2860 against the dollar, down from a high of $1.2988 at one point.

Stateside, U.S. stocks jumped on the back of strong earnings reports from companies such as Netflix and Morgan Stanley.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 97.614, sliding from an earlier high of 98.113.

The Japanese yen traded at 108.54, a touch stronger than 108.67 seen earlier. The Australian dollar changed hands at $0.6829 following a low of $0.6819 seen earlier.

Oil prices declined in morning trade during Asian hours: Global benchmark Brent fell 0.42% to $59.58 per barrel while U.S. crude was almost flat at $53.88 per barrel.