Asian markets exhibit mixed performance with negative bias, China’s SSE Composite falls

• Asian markets demonstrate mixed performance as US data diminish rate cut possibility in March.
• China’s equity markets face challenges due to deflationary pressures in China.
• Japan’s Nikkei 225 rose to 35,570, while Hong Kong’s Hang Seng is up at 15,374.
• S&P/ASX 200 index receives losses on weaker sectors like materials, energy, and real estate.

Asian shares display a mixed performance as the release of Retail Sales data from the United States (US) on Wednesday led traders to scale back their expectations of the US Federal Reserve’s initial interest rate cut in March.

As of the latest market updates, China’s SSE Composite Index has experienced a 1.59% decline, reaching 2,788, while the Shenzhen Component Index is down by 0.91% at 8,680. The S&P/ASX 200 in Australia has decreased by 0.68% to 7,342. Japan’s Nikkei 225 has risen to 35,570, reflecting a 0.27% increase. Hong Kong’s Hang Seng is up by 0.64% at 15,374. The Korean KOSPI has advanced to 2,444, showing a 0.34% increase.

The stock markets in China are encountering difficulties due to recent economic indicators revealing a bleak economic landscape. This downturn is dissuading both consumers from spending and businesses from extending their operations, thereby undermining China’s prospects for long-term economic growth.

In December, year-over-year China’s Retail Sales failed to meet market expectations. Additionally, the annual Gross Domestic Product (GDP) growth in the fourth quarter fell below anticipated levels. The country experienced a third consecutive month of declining consumer prices, accompanied by a decrease in producer prices. These trends indicate ongoing deflationary pressures on costs in China.

The Tokyo market has reached its highest point in three decades, driven by the anticipation that companies will enhance shareholder returns through actions such as unwinding cross-holdings, implementing share buybacks, and adopting other strategic measures. Approximately half of Japanese companies are contemplating the review or restructuring of their businesses to enhance corporate value, with a focus on potential acquisitions.

Australian Consumer Inflation Expectations maintained stability in January, and the seasonally adjusted Unemployment Rate remained in line with expectations for December. Nevertheless, the Employment Change data indicated a decline, contributing to the argument that interest rates may have reached their peak as the once-booming labor market shows signs of cooling. Despite these developments, there has been a restrained market response to the job-related data. The S&P/ASX 200 index experienced a decline, primarily driven by significant losses in the materials, energy, and real estate sectors.