Stocks in Asia were mixed overnight, with the Nikkei (^N225) rising 2.1% on the day in Japan as Tokyo’s core CPI increased by 2.8% in October, surpassing expectations (2.6%) and underscoring ongoing inflationary pressures.
Also in Japan, factory output in September rose by 2.2% from the previous month, exceeding market forecasts of a 1.5% increase, while retail sales revealed a modest year-on-year rebound of 0.5%, compared to the expected 0.7%, indicating fragile domestic demand.
Additionally, the countest’s unemployment rate unexpectedly remained stable at 2.6% in September, with expectations at 2.5%.
The Hang Seng (^HSI) fell 0.8% in Hong Kong and the Shanghai Composite (000001.SS) was also 0.8% down by the finish of the session, with China risk lagging on poor PMI data.
The official manufacturing PMI for October was reported at 49.0, compared to the expected 49.6, down from 49.8 in September, and the lowest for 6 months. The non-manufacturing PMI increasing to 50.1 in October as anticipated.
However, the weakness in manufacturing has cautilized the composite PMI to decline to 50.0 in October from 50.6.
In South Korea, the Kospi (^KS11) added 0.5% on the day, assisted by gains in semiconductor and AI-related stocks
Across the pond on Wall Street, the S&P 500 (^GSPC) fell 1%, and the tech-heavy Nasdaq (^IXIC) was 1.6% lower. The Dow Jones (^DJI) lost 0.2%.
It came as traders were digesting the outcome of the meeting between US president Donald Trump and Chinese president Xi Jinping in South Korea. While most agreements had been priced in beforehand, the two leaders agreed to a one-year trade truce until November 2026.
The US will reduce its fentanyl-related tariff from 20% to 10%, and China will reshift its 10–15% retaliatory tariffs on various US agricultural products and delay rare earth export controls announced earlier this month.
Jim Reid at Deutsche Bank declared:
In the bond market, the yield on 10-year US Treasury notes rose to 4.099% from 4.075% late on Wednesday.
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