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China markets fall despite economic data beating expectations; Chinese yuan weaker than 7 against dollar

Abigail Ng

This is CNBC's live blog covering Asia-Pacific markets.

Pedestrians cross a road in front of an electronic quotation board displaying the numbers of company stock prices on the Tokyo Stock Exchange in Tokyo on May 13, 2021.
KAZUHIRO NOGI | AFP via Getty Images

Shares in the Asia-Pacific fell Friday as investors digest U.S. economic data and China's industrial production and retail sales figures for August, which beat expectations.

The Shenzhen Component in mainland China briefly pared some losses after the data release but then extended losses and closed 2.303% lower at 11,261.50, and the Shanghai Composite was down 2.3% at 3,126.40.

The offshore Chinese yuan weakened past 7 against the dollar overnight, and last changed hands at 7.03.

The onshore yuan also crossed the 7 level in Asia's morning trade after the People's Bank of China set the daily midpoint at 6.9305 against the dollar. It was last at 7.0187 per dollar.

Japan's Nikkei 225 fell 1.11% to 27,567.65, and the Topix index slipped 0.61% to 1,938.56.

In Australia, the S&P/ASX 200 declined 1.52% to 6,739.10. South Korea's Kospi shed 0.79% to 2,382.78 and the Kosdaq lost 1.45% to 770.04.

Hong Kong's Hang Seng index was down 0.8% in the final hour of trade.

MSCI's broadest index of Asia-Pacific shares outside Japan dropped 1.39%.


Overnight in the U.S., the Nasdaq Composite dropped 1.43% to 11,552.36. The S&P 500 declined 1.13% to 3,901.35 and the Dow Jones Industrial Average fell 173.27 points, or 0.56%, to 30,961.82, its lowest close since July 14.

"Equities and other risk-sensitive markets [will] struggle as it becomes clear that U.S. inflation pressures are well embedded and that risks to the fed funds rate lie to the upside," ANZ Research analysts wrote in a Friday note.

— CNBC's Jesse Pound and Tanaya Macheel contributed to this report.

Oil prices climb after sliding to weekly low

Oil prices climbed on Friday, after sliding 3.5% to a weekly low in the previous session on the back of demand concerns.

Brent crude futures rose 0.4% to stand at $91.20 per barrel, while U.S. West Texas Intermediate rose 0.28% to $85.34 per barrel.

— Lee Ying Shan

U.S. 2-year Treasury yield briefly touches 3.9%

The yield on the U.S. 2-year Treasury note briefly reached 3.901%, before pulling back slightly to 3.8921% in Asia's morning trade.

That's the highest level since 2007. Yields move inversely to prices, and a basis point is equal to 0.01%.

The 10-year Treasury yield was last at 3.4567% after touching 3.459%, while the yield on the 30-year Treasury bond was lower at 3.4743%.

— Abigail Ng

China's retail sales, industrial production for August beat estimates

China's latest economic data release showed growth accelerated in August.

Retail sales increased 5.4% in August from the same period last year, much higher than July's 2.7% and also above the Reuters forecast of 3.5%.

Industrial production grew 4.2% last month compared with a year ago, topping the prediction of 3.8% in a Reuters poll. Industrial output came in at 3.8% in July.

Fixed asset investment for January to August this year increased by 5.8%, beating the 5.5% estimate from Reuters.

— Abigail Ng, Evelyn Cheng

Onshore yuan crosses the 7 level after weaker-than-expected daily midpoint fixing

The onshore Chinese yuan crossed the important level of 7 against the U.S. dollar after the People's Bank of China set the yuan's daily midpoint at 6.9305 against the dollar.

That midpoint is the weakest level since August 2020 and weaker than the analyst forecast of 6.9228 per dollar, according to Reuters.

The fixing came after the offshore yuan crossed 7 against the greenback overnight. Both the onshore and offshore yuan continue to trade above 7 per dollar.

— Abigail Ng

CNBC Pro: Top tech investor Paul Meeks picks between Apple and Samsung

Tech stocks suffered yet another sell-off this week as investors digested a hotter-than-expected August inflation report.

Amid a tough year for the sector, some investors are seeking refuge in the relative safety of mega-cap stocks. Top tech investor Paul Meeks weighs in on two such stocks and reveals which he prefers in the current environment.

Pro subscribers can read more here.

— Zavier Ong

China's August industrial output, retail sales expected to grow

China's industrial output is expected to come in at 3.8% for August, according to a Reuters poll. That's the same pace of growth as July.

Retail sales are predicted to have increased 3.5% last month, compared to the 2.7% reported in July.

— Abigail Ng

Offshore yuan still weaker than 7 against dollar after crossing the key level

The Chinese yuan weakened past 7 against the U.S. dollar for the first time since July 2020 overnight.

In Asia morning trade, the offshore yuan was trading flat at 7.0131 against the greenback.

The onshore yuan has been inching closer to the 7 level, but has not crossed it this year.

— Abigail Ng

CNBC Pro: What's next for the sinking yen? Here's what the pros say

The Japanese yen has fallen sharply against the U.S dollar this year and is now hovering near 24-year lows.

Amid reports that that Japan may intervene to prop up the currency, CNBC Pro spoke with foreign exchange analysts for their thoughts on intervention and where they see the dollar-yen heading next.

Pro subscribers can read more here.

— Zavier Ong