Asian Shares End Choppy Session Mostly Lower

Asian stocks ended mostly lower on Monday after reaching a 29-month high earlier in the day in reaction to an upbeat reading on China’s service sector activity data.

Japanese shares outperformed on expectations there is likely to be continuity in both fiscal and monetary policy.

Chinese shares ended slightly lower as investors reacted to mixed economic data. The benchmark Shanghai Composite index slid 8.13 points, or 0.24 percent, to 3,395.68, while Hong Kong’s Hang Seng index dropped 0.96 percent to 25,177.05.

The manufacturing sector in China continued to expand in August, albeit at a slower pace, the latest survey from the National Bureau of Statistics revealed with a manufacturing PMI score of 51.0. That missed expectations for a reading of 51.2 and it’s down from 51.1 in July.

Meanwhile, the non-manufacturing index came in with a score of 55.2 – beating forecasts for 55.0 and up from 54.2 in the previous month in a hopeful sign of reviving consumer demand.

Japanese shares led regional gains as Yoshihide Suga, the chief Cabinet secretary and a close ally of Prime Minister Shinzo Abe, emerged as a leading candidate to take over the nation’s highest political position.

Speculation was rife that the new PM will continue the fiscal and monetary policies that defined the Abe regime. The ruling Liberal Democratic Party will vote on Sept. 14 to select a new leader to succeed Abe, Jiji news agency reported.

The Nikkei average climbed 257.11 points, or 1.12 percent, at 23,139.76 after falling 1.4 percent on Friday following Abe’s sudden resignation. The broader Topix index closed 0.83 percent higher at 1,618.18.

Itochu Corp rallied 4.2 percent, Marubeni Corp surged 9.5 percent, Mitsubishi Corp jumped 7.7 percent, Mitsui & Co added 7.4 percent and Sumitomo Corp advanced 9.1 percent after Warren Buffett’s Berkshire Hathaway said it acquired a slightly more than 5 percent stake in each of the five leading trading companies over the past twelve months.

SoftBank Group Corp rallied 3.1 percent on news it would sell a $14 billion chunk of its Japanese mobile unit.

In economic news, industrial output in Japan climbed a seasonally adjusted 8.0 percent on month in July, the Ministry of Economy, Trade and Industry (METI) said in a report today. That beat forecasts for a gain of 5.8 percent and was up from 1.9 percent in June.

On a yearly basis, industrial production sank 16.1 percent – missing forecasts for a decline of 15.0 percent after tumbling 18.2 percent in the previous month.

The METI also said that the total value of retail sales in Japan was down a seasonally adjusted 3.3 percent on month in July. That missed forecasts for a gain of 3 percent and was down from 13.1 percent in June.

On a yearly basis, retail sales sank 2.8 percent – again shy of expectations for a decline of 1.7 percent following the 3.9 percent increase in the previous month
Australian markets ended modestly lower ahead of RBA rate decision and GDP data for the second quarter due this week.

The benchmark &P/ASX 200 index dropped 13.30 points, or 0.22 percent, to 6,060.50, while the broader All Ordinaries index ended down 14.90 points, or 0.24 percent, at 6,245.90.

IOOF Holdings shares entered a trading halt after the wealth manager agreed to acquire National Australia Bank’s wealth business, MLC, for $1.44 billion. NAB shares ended little changed.

Healthcare stocks fell, with heavyweight CSL declining 1.3 percent and Resmed losing 1.6 percent. Gold miners rose as the precious metal advanced on dollar weakness. Evolution Mining, Northern Star Resources and Newcrest gained 1-2 percent.

Seoul stocks gave up early gains to end lower as the country counted its 18th straight day of triple-digit daily jump in coronavirus cases, bringing the national caseload to 19,947, including 324 deaths. The benchmark Kospi fell 27.63 points, or 1.17 percent, to 2,326.17.

Industrial output in South Korea was up a seasonally adjusted 1.6 percent on month in July, Statistics Korea said – shy of expectations for an increase of 1.9 percent and down from 7.2 percent in June.

On a yearly basis, industrial production sank 2.5 percent – again missing forecasts for a drop of 1.2 percent after easing 0.5 percent in the previous month.

The total value of retail sales in South Korea was down a seasonally adjusted 6.0 percent on month, Statistics Korea said. That missed expectations for a decline of 3.5 percent following the 3.4 percent increase in June.

On a yearly basis, retail sales rose 0.5 percent – again shy of expectations for a gain of 3 percent following the 6.3 percent jump in the previous month.

New Zealand shares tumbled amid relatively quiet trading as the bourse’s website crashed for the fifth day running. The benchmark NZX 50 index dropped 155.96 points, or 1.29 percent, to 11,937.56.

U.S. stocks rose on Friday as investors continued to react to the Fed’s new monetary policy strategy and cheered upbeat economic data as well as Abbott Laboratories’ breakthrough announcement in the coronavirus testing market.

The tech-heavy Nasdaq Composite gained 0.6 percent and the S&P 500 added 0.7 percent to reach fresh record closing highs, while the Dow Jones Industrial Average rose 0.6 percent to hit its best closing level in over six months.

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