Asian stocks fall as China rebound stalls, Japan losses deepen
Investing.com-- Most Asian stocks retreated on Friday as a stimulus-driven rebound in Chinese shares stalled, while Japan’s Nikkei 225 slid further away from 34-year highs as growing bets on a Bank of Japan pivot spurred more profit-taking.
Caution before key U.S. inflation data due later in the day, and an upcoming Federal Reserve meeting next week also kept investors on edge over risk-driven assets. This saw regional markets largely shrug off positive cues from a record-high overnight finish on Wall Street.
A rebound rally in Chinese markets appeared to have run out of steam, with the Shanghai Shenzhen CSI 300 and Shanghai Composite indexes falling slightly on Friday. The two rebounded sharply from five and four-year lows this week after the People’s Bank of China unexpectedly cut its reserve requirement ratio for local banks, freeing up about 2 trillion yuan ($140 billion) in liquidity.
The two Chinese benchmarks were set to add more than 2% each this week- their best weekly performance since July 2023.
Hong Kong’s Hang Seng index fell 0.3%, with heavyweight Tencent Holdings Ltd (HK:0700) among the top weights on the index after Citibank cut the internet giant’s price target, warning that a slowdown in China’s video game industry was likely to weigh on revenue.
The Hang Seng was set to add over 5% this week, as it rebounded from a 15-month low.
But analysts questioned just how much economic support more monetary stimulus would provide to the Chinese economy, given that consumer and business spending in the country remained weak. Business activity also failed to pick up substantially over the past year.
Purchasing managers index data for January is now due next week, and is expected to provide more cues on business
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