Asian Stocks Consolidate as China Reports 7% Decline in Industrial Profits.

Highlights:

Asian stock markets were mixed after China said industrial profits fell more than 7% in November, the fourth straight month of declines.

The Nikkei-225 jumped 1.8% to 40,285.25 later, with the Japanese currency falling as concerns grew over delayed interest rate cuts from the Bank of Japan.

Industrial profits in China fell nearly 5% year-on-year from January-November, adding to the region’s ongoing economic woes.

Key background:

Asian stock markets were mixed on Friday as China said industrial profits fell for the fourth month in a row in November. Another factor worrying investor sentiment was the drop in oil prices and the fall in US futures. Meanwhile, in Japan, the Nikkei 225 index rose 1.8%, to 40,285.25, following positive signals from the Bank of Japan Governor, who indicated a possible delay in interest rate hikes due to global economic conditions, including US import restrictions in various countries. The yen saw a decline in activity to ¥157.71 from ¥158.00 as the dollar had fallen in the past few days below ¥150 at one point.

In contrast, Hong Kong’s Hang Seng index fell 0.1% to 20,120.54, while the Shanghai Composite gained 0.5%, closing at 3,399.27. Industrial profits in China fell more than 7% in November year-on-year, part of the largest annual decline and nearly 5% of the decline occurred during the first 11 months. South Korea’s Kospi fell 0.8% to 2,410.35 as political uncertainty followed after the opposition proposed the impeachment of Acting President Yoon Suk Yeol amid concerns over a constitutional crisis.

US markets were relatively flat. The S&P 500 closed at about 6,037.59, the Dow Jones added 0.1% to 43,325.80, and the Nasdaq Composite fell 0.1% to 20,020.36. Low trading rates and subdued activity for the holiday season, analysts are calling a “holding pattern” for US stocks. Benchmark crude on the commodity market fell to $69.58 per barrel, while Brent crude fell to $72.78 per barrel. Investors will be closely monitoring next week’s data on US economic indicators such as new home sales, construction spending, and manufacturing activity.