Friday, local shares were unable to escape the towering gloom of Wall Street’s overnight selloff, while investors appear to shrug off Chinese consumer- and wholesale-price data that print broadly in line with expectations.
The Nikkei Stock Average has finished down 2.4%, losing hold of the 14,000 level and capping a very tough week for the Japanese benchmark amid yen’s gains over the past five days. It was the worst week for Japanese equities since March 2011, when a catastrophic earthquake and tsunami slammed the nation and sparked a separate nuclear-radiation disaster in Fukushima.
For the year to date, the Nikkei is down 14.3%, but more than half of that loss is from the 7.5% beating this past week.
Investors have been dumping shares of Toyota Motor since the auto maker announced on Wednesday a total recall of 6.4 million vehicles worldwide for a variety of issues. But analysts at Jefferies just suggested that now may be a good time to buy the stock, as well as other Japanese automakers. The securities firm on Friday upgraded Toyota Motor from “Hold” to “Buy”, while also lifting the rating for Japan’s auto sector to “Bullish.”
The Hong Kong’s Hang Seng Index closed 0.68% down on Friday and up 2.21% for the week, while the Shanghai Composite Index weakened 0.18% and up 3.46% for the week.
The big mainland Chinese banks were broadly softer Friday, with Agricultural Bank of China down 1.8%, China Construction Bank down 1.4%, and ICBC down 2%.
Casinos were also a soft spot: Sands China is down 3.1%, and Galaxy Entertainment is down 2.1%, while outside the Hang Seng Index, MGM China and Wynn Macau are 2% lower each.
And the tech names are also understandably weak, given a 3.1% plunge in the Nasdaq on Thursday. Index heavyweight Tencent Holdings is down 4%, while Lenovo is off a more modest 0.7%.
While today’s data show that China’s consumer prices accelerated their gains in March, reversing a downward trend seen over the past few months, analysts see signs that the inflation outlook is still pretty benign.
This, in turn, opens up some space for possible monetary easing as China’s economy slows, even though officials in Beijing have indicated they won’t be going that route, at least for now.
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