Asian stock markets exhibited a subdued performance on Wednesday as investors kept a watchful eye on forthcoming U.S. inflation data. Meanwhile, Chinese property stocks saw notable gains, notably embattled developer Country Garden, which secured further extensions on its debt payments.
Asian markets took their cue from a lackluster Wall Street session, which witnessed a decline in technology stocks just before the release of inflation figures. Apple Inc. (NASDAQ:AAPL) also experienced a nearly 2% drop following the launch of its new range of iPhones, with some investors expressing disappointment over the pricing.
Among Asian-listed Apple suppliers, performance was mixed. AAC Technologies (HK:2018) and Luxshare Precision Industry (SZ:002475) declined by 0.7% and 1.9%, respectively, while SK Hynix Inc (KS:000660) and Samsung Electronics Co Ltd (KS:005930) recorded gains of 1.1% and 0.3%, respectively.
Sunny Optical Technology Group (HK:2382), a camera module maker, surged by 3.4%, benefiting from Apple’s announcement of a significant camera upgrade for its latest iPhone lineup.
Across the broader Asian markets, most indices either traded flat or experienced declines. Australia’s ASX 200 index led regional losses with a 0.9% decrease. Japan’s Nikkei 225 fell by 0.3% due to a Reuters poll indicating a decline in business confidence among the country’s largest firms in early September. Concerns over a slowdown in China, a significant export market for Japan, contributed to this decline.
Futures for India’s Nifty 50 index suggested a robust opening, following data from Tuesday that showed lower-than-expected growth in consumer inflation for August. The Nifty index was also trading near record highs, reflecting growing optimism regarding the South Asian economy.
Chinese Stocks Struggle, but Property Sector Thrives
In China, both the Shanghai Shenzhen CSI 300 and Shanghai Composite indexes declined by 0.6%, while Hong Kong’s Hang Seng index dropped by 0.3%. Sentiment toward China remained generally pessimistic, as various economic indicators for August painted a subdued picture of Asia’s largest economy. This sentiment was compounded by a slow rollout of additional stimulus measures by Beijing.
However, the property sector provided a ray of hope on an otherwise lackluster day. Troubled developer Country Garden Holdings (HK:2007) surged by over 11% after securing approval from some bondholders to extend payments for three years, alleviating fears of an imminent default. This positive development spilled over to other major players, with Sunac China (HK:1918), Shimao Property (HK:0813), and Longfor Properties Co Ltd (HK:0960) posting gains ranging from 2% to 6%.
Focus on US CPI Inflation and Fed Meeting
Market attention now turns to the forthcoming release of U.S. Consumer Price Index (CPI) inflation data, scheduled for later in the day. Expectations are for an acceleration in inflation for August compared to the previous month, driven by rising fuel prices and robust consumer spending.
Any increase in U.S. inflation is likely to provide the Federal Reserve with additional motivation to raise interest rates, with the central bank set to make a decision on rates next week. Higher rates are generally seen as unfavorable for risk-driven markets and may lead to a limitation of capital inflows into Asia.
