Asia report: Most markets start November in the red

(Sharecast News) - Asia-Pacific markets faced declines on Friday, mirroring Wall Street's recent downturn, as investors braced for the Federal Reserve's upcoming interest rate decision and the imminent US elections. Despite a stronger-than-expected Caixin China manufacturing PMI for October, sentiment was broadly cautious across the region, with only Hong Kong's Hang Seng Index bucking the trend to post gains.

"With global markets in a sea of red and US Treasury rates close to three-month highs on Friday, Asian markets began the potentially volatile month warily as investors awaited US payroll data, even though a rate cut is widely expected next week," said Patrick Munnelly at TickMill.

"With a 0.3% decline, MSCI's broadest index of Asia-Pacific stocks outside of Japan fell 1.9% for the week.

"A higher yen clouded the outlook for Japanese exporters, causing Tokyo's Nikkei to drop."

Munnelly noted that Hong Kong's Hang Seng index increased, however, after data revealed that factory activity in China resumed expanding in October.

"Despite both firms exceeding earnings projections, shares of Microsoft and Facebook's parent company Meta Platforms dropped 6% and 4% overnight as investors feared that rising artificial intelligence will reduce their earnings.

"Since data indicated that US consumption remained strong and inflation indicators indicated that price pressures were abating, a quarter-point rate drop by the Fed is 94% priced in, barring a significant surprise in the payrolls report.

"As a result of claims that Iran is preparing to launch a retaliation strike on Israel from Iraqi territory in the coming days, oil prices continued their upward trend, with Brent prices rising over 2% to $74.13 per barrel."

Most markets start new month in the red

In Japan, the Nikkei 225 dropped by 2.63% to 38,053.67, and the Topix declined 1.9% to 2,644.26, as tech and manufacturing stocks came under pressure.

Lasertec plummeted 16.44%, while Subaru Corporation and Fujitsu also posted significant losses of 11.5% and 9.04%, respectively.

China's major indexes were mixed, with the Shanghai Composite down 0.24% at 3,272.01 and the Shenzhen Component shedding 1.28% to close at 10,455.50.

Key decliners included Shanghai Huili Building Materials, which fell 10.42%, and Beijing Piesat Information Technology, which dropped 10.26%.

Hong Kong's Hang Seng Index rose 0.93% to 20,506.43, lifted by strength in tourism and logistics stocks.

Sands China surged 5.45%, while Orient Overseas International gained 5.01%.

Elsewhere, South Korea's Kospi 100 slid 0.38% to 2,542.51, led by a 24.08% plunge in Hanmi Science.

In Australia, the S&P/ASX 200 edged down 0.5% to 8,118.80, with mining stocks like Zimplats Holdings declining 5.85%.

New Zealand's S&P/NZX 50 dropped 0.63% to 12,559.28, with Synlait Milk falling nearly 5%.

In currency markets, the dollar was generally stronger, last rising 0.49% on the yen to trade at JPY 152.78, as it gained 0.22% against the Aussie to AUD 1.5227, and advanced 0.15% on the Kiwi, changing hands at NZD 1.6756.

Oil prices also advanced, with Brent crude futures last up 2.55% on ICE to $74.67 per barrel, and the NYMEX quote for West Texas Intermediate adding 2.77% to $71.18.

China manufacturing sector returns to expansion in October

In economic news, China's manufacturing sector showed signs of modest recovery in October, with the Caixin manufacturing purchasing managers' index (PMI) reaching 50.3.

The reading, which surpassed the 49.7 expected by economists in a Reuters poll, moved back into expansionary territory after September's contraction at 49.3.

A PMI above 50 indicates growth in the manufacturing sector, while a figure below that level points to contraction.

Meanwhile, Australia's producer prices eased in the third quarter.

The producer price index (PPI) rose 3.9% year-on-year, down from a 4.8% increase in the prior quarter, according to the Australian Bureau of Statistics.

On a quarterly basis, producer prices rose by 0.9%, a slight dip from the 1% recorded in the prior quarter, reflecting cooling inflationary pressures in the country's production costs.

Reporting by Josh White for Sharecast.com.