Asia Markets

Asia stocks decline; Japan's autos fall after US House passes new North American trade deal

Key Points
  • Asia markets declined by the close on Friday.
  • U.S. markets broke a new record. Positive trade news further boosted sentiment, as a new North American trade deal was passed by the U.S House of Representatives on Thursday.
  • Japanese autos took a tumble in response to the new trade deal.
  • China on Friday left its new lending benchmark — the loan prime rate — unchanged, as expected, after it kept rates of medium-term loans steady earlier this month.

Major Asia stocks declined by the close on Friday, as U.S. markets broke a new record, with positive news on the trade front further boosting sentiment.

Mainland Chinese stocks were little changed in the afternoon. The Shanghai composite fell 0.40% to close at 3,004.94, while the Shenzhen component declined 0.65% to 10,229.49. The Shenzhen composite tumbled 0.70% to 1,700.99.

Hong Kong's Hang Seng index was flat in its last hour of trading.

China on Friday left its new lending benchmark — the loan prime rate — unchanged, as expected, after it kept rates of medium-term loans steady earlier this month.

Japan's Nikkei 225 followed the downward trend, dipping 0.20% to close at 23,816.63, and the Topix index edged down 0.18% to 1,733.07. The country's core consumer inflation rose 0.5% in November from a year earlier, according to government data on Friday — still far from its elusive 2% target.

Australia's S&P/ASX 200 fell 0.25% to close at 6,816.30.

In South Korea, the Kospi bucked the regional trend, rising 0.35% to 2,204.18.

MSCI's broadest index of Asia-Pacific shares lost 0.13%.

Meanwhile, Chinese President Xi Jinping, at a Friday ceremony to mark the 20th anniversary of Macao's handover, encouraged the diversification of its casino-dependent economy. Officials have been expecting measures to include a new yuan-denominated stock exchange, according to a Reuters report.

Macao gaming stocks listed in Hong Kong were in focus on Friday. Galaxy Entertainment dropped 2.47%, Wynn Macau fell 1.29%, and Sands China lost 1.50%.

Over in the U.S., investors swept aside news of U.S. President Donald Trump's impeachment, with the S&P 500 breaking past 3,200 for the first time. It advanced 0.5% to 3,205.37, marking its first close above 3,200. The Dow Jones Industrial Average climbed 137.68 points, or 0.5% to 28,376.96. The Nasdaq Composite gained 0.7% to end the day at 8,887.22.

Japanese autos tumble

Positive trade news further boosted sentiment, after a new North American trade deal was passed in the U.S. House of Representatives on Thursday. The deal is expected to be approved by the Senate next year. The United States-Mexico-Canada Agreement replaces the North American Free Trade Agreement (NAFTA).

But Japanese autos took a tumble in response. The new deal included a requirement that 75% of auto parts come from North America, up from the previous 62.5% required by NAFTA.

While those rules are aimed at substantial increases in domestic production, that's likely to hit automakers in Japan. Many Japanese automakers have production bases in Mexico. They manufacture cars and trucks in the North American nation for export, according to data from Mexico's auto industry association AMIA.

Toyota tumbled 1.11%, Nissan lost 1.13%, while Mazda declined 0.83%, and Suzuki pared some losses to tumble 0.84%. Mitsubishi was down 1.04%.

Oil and currencies

The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 97.421, retreating from a high of 97.486 earlier.

The Japanese yen traded at 109.26 against the dollar, strengthening from levels above 109.5 earlier.

The Australian dollar last changed hands at $0.6888, strengthening after much stronger-than-expected jobs data on Thursday. It was hovering around levels of 0.685 earlier.

Oil prices didn't budge much during the morning of Asian trading hours. U.S. crude fell marginally 0.10% to $61.13 , while Brent crude rose 0.11% to $66.61 per barrel.

Here's the economic calendar for Wednesday (all times in HK/SIN):

4:30 p.m. Hong Kong's consumer price index