Channel NewsAsia

Asia stocks mixed as Chinese inflation at 18-month low

Asian stocks were mixed on Friday after weak Chinese inflation data raised concerns about the risk of deflation in the world's second-largest economy but also opened the door to possible stimulus measures from Beijing.

HONG KONG: Asian stocks were mixed on Friday after weak Chinese inflation data raised concerns about the risk of deflation in the world's second-largest economy but also opened the door to possible stimulus measures from Beijing.

Tokyo closed up 0.59 per cent, or 35.81 points, to 14,199.59, as bargain-hunting reversed opening losses triggered by a strong yen.

Sydney slipped 0.29 per cent, or 16.0 points, to end at 5,460.8, while bargain-hunting saw Seoul close up 0.31 per cent, or 5.95 points, at 1,956.55.

Hong Kong rose 0.12 per cent, or 25.87 points, to 21,862.99, while Shanghai slipped 0.20 per cent, or 4.13 points, to 2,011.14.

Chinese annual inflation fell sharply to 1.8 per cent in April, the lowest reading since October 2012 and well below the 3.5 per cent annual target set by Beijing.

"The CPI figure, which was an 18-month low, showed weakness in the domestic economy," Zheshang Securities analyst Zhang Yanbing told AFP.

The data is likely to add to worries that deflation could be looming as Chinese growth slows.

Moderate inflation can be a boon to consumption as it encourages consumers to buy before prices go up, but falling prices encourage consumers to put off spending and companies to delay investment, both of which act as brakes on growth.

The data gives Beijing room for easing, although top officials have publicly ruled out a massive stimulus package to kick-start growth and have instead introduced a series of smaller measures.

"For the government, it can carry out its mini stimulus by speeding up fiscal spending to boost aggregate demand," ANZ economists Liu Ligang and Zhou Hao said in a research note.

There was no clear lead from US stocks, which finished mixed on Thursday, as selling pressure continued to dog the technology sector amid worries about overvaluations.

The Dow Jones Industrial Average finished up 0.20 per cent, or 32.43 points, at 16,570.97, the broad-based S&P 500 slipped 0.14 per cent, or 2.58 points, to 1,875.63.

The tech-rich Nasdaq Composite lost 0.40 per cent, or 16.18 points, to 4,051.50.

Trade was heavy in Twitter, which rebounded 3.7 per cent after two days of sharp selling sparked by the end of a blackout period for pre-IPO investors to sell their shares.

In forex trade, the dollar was delicately balanced in Asia on Friday as investors braced for disputed local independence referendums in Ukraine that could further ramp up global tension and undermine optimism.

The dollar, which dropped to 101.54 yen early Friday, recovered to 101.70 yen in afternoon trading, compared with 101.66 yen in New York on Thursday afternoon.

The euro edged down after European Central Bank chief Mario Draghi said the bank was prepared to further ease monetary conditions next month if the economy needed it.

The euro fetched $1.3833 and 140.68 yen against $1.3840 and 140.69 yen in US trade.

Oil rose on escalating fears of a full-blown armed conflict in Ukraine as pro-Moscow rebels press on with independence referendums.

The US benchmark, West Texas Intermediate for June delivery, climbed 34 cents to $100.60 in Asian trade. Brent North Sea crude for June was up 37 cents at $108.41.

Gold fetched 1,289.14 an ounce at 10.45 GMT, down from $1,295.34 on Thursday.

In other markets:

-- Mumbai rose 2.91 per cent, or 650.19 points, to close at 22,994.23 points after touching a fresh lifetime high of 23,048.49 points during the session.
HDIL surged 18.07 per cent to 78.10 rupees and YES Bank gained 9.26 per cent to 483.95 rupees.

-- Singapore closed up 0.14 per cent, or 4.44 points, at 3,252.13.
Agribusiness company Wilmer International eased 3.89 per cent to S$3.21, while United Overseas Bank rose 2.05 per cent to S$22.45.

-- Jakarta ended up 0.77 per cent, or 37.25 points, at 4,898.14.
Taxi firm Express Transindo Utama gained 3.49 per cent to 1,335 rupiah, while retailer Ramayana Lestari Sentosa fell 1.53 per cent to 1,285 rupiah.

-- Bangkok lost 0.12 per cent or 1.65 points to 1,377.37.
Telecoms company True Corporation rose 2.26 per cent to 6.80 baht, while Central Plaza Hotel dropped 4.13 per cent to 29.00 baht.

-- Kuala Lumpur gained 3.88 points or 0.21 per cent to 1,866.72.
Utility Tenaga Nasional added 0.3 per cent to 12.00 ringgit, while Telekom Malaysia rose 1.8 per cent to 6.19. SapuraKencana Petroleum lost 0.2 per cent to 4.26 ringgit.

-- Taipei closed down 0.46 per cent, or 41.21 points, at 8,889.69.
TSMC rose 0.42 per cent to NT$120.0 while HTC fell 2.95 per cent to NT$164.5.

-- Wellington fell 0.17 per cent, or 8.74 points, to 5,152.67.
Telecom Corp slipped 0.50 per cent to NZ$2.625 and Contact Energy was off 0.36 per cent at NZ$5.48.

-- Manila climbed 1.21 per cent, or 82.05 points, to 6,847.26 after a surprise credit rating upgrade of the Philippines by Standard and Poor's.
Top-traded Philippine Long Distance Telephone rose 2.76 per cent to 2,974.00 pesos. SM Investments advanced 2.82 per cent to 765.00 pesos, while Ayala Land added 3.23 per cent to 31.95 pesos. 

Tweet Photos, Videos and Update on this Story to  #cna