Asian indices ended higher on the back of encouraging inflation data out of China while Thailand’s market is bouncing back after the death of Thai King Bhumibol Adulyadej.
Hong Kong’s Hang Seng grew 0.9 percent to end the day at 23,233 while Tokyo’s Nikkei 225 advanced 0.5 percent to finish at 16,857. Shanghai’s SSE was nearly flat at 3,064. Thailand’s SET Index was gaining 4.4 percent in late-day trade after tumbling earlier in the week in the lead up to its long-serving monarch’s death.
In Tokyo, Fast Retailing saw its shares gain 5 percent to end 34,800 yen. Although the retailer saw a 56.3 percent drop in full-year net profits and trimmed its 2020 forecasts, the company said it expects to greatly improve its profitability this fiscal year thanks to cost-cutting measures. Isetan Mitsukoshi rose 0.8 percent to end at 1,040 yen.
In Hong Kong, Esprit gained 1.2 percent to end at 6.63 Hong Kong dollars. Global Brands fell 2.2 percent to end at 0.90 Hong Kong dollars. Chow Tai Fook grew 0.2 percent to end at 5.51 Hong Kong dollars.
China’s producer price index rose 0.1 percent year-on-year for September, the first factory gate inflation gain in four years. Meanwhile, the country’s consumer price index rose by 1.9 percent year on year, up from a 1.3 percent rise recorded last month.
The better-than-expected data may indicate that the Chinese economy is steadying, as it switches from a manufacturing based economy to a more consumer-based economy and curbs industrial over capacity. Still, there are mixed signals. Just Thursday, China said its exports for September fell 10 percent while imports fell 1.9 percent.
“PPI numbers have been at extremely low levels for a very long time and we are getting to a point now where excess supply of commodities has been used up leading to an increase in the PPI for a lot of manufacturers,” said Benjamin Cavender, principal at China Market Research Group.
Interestingly, the producer price index for clothing rose by 0.7 percent year-on-year, signaling a shift in the domestic apparel industry.
“The good news for manufacturers is they typically have some leeway to push their costs onto the brands or consumers buying their products. Apparel manufacturers in Vietnam, Sri Lanka and other major manufacturing centers are going to be hit with the same materials price increases. So while this may impact profits a little bit, it won’t really reduce the competitiveness of Chinese manufacturers,” said Cavender.