Asia report: Markets mixed, Korean airlines in focus after crash

(Sharecast News) - Asia-Pacific markets traded mixed on the penultimate trading day of 2024, as weak industrial data from South Korea, geopolitical uncertainties, and declining Wall Street momentum weighed on investor sentiment. South Korea's Kospi declined, with airline stocks particularly hit after the country's deadliest air disaster.

Meanwhile, Chinese equities outperformed with notable gains in select sectors.

"South Korea continues to sit on the headlines beyond a lacklustre attention for its Squid Game 2," quipped Swissquote Bank senior analyst Ipek Ozkardeskaya.

"The political shenanigans are now topped by a deadly airplane crash that cost the lives of 179 people.

"Jeju Air tumbled at the open, even though the losses were partially recovered at the time of writing."

Ozkardeskaya noted that beyond Korea, Asian markets opened the week on a negative note.

"The Japanese Nikkei and Australian stocks were offered this Monday with trading volumes nearly 20% lower for the Japanese market, and 55% lower for their Australian peers.

"Futures point at an unappetizing start for the last Monday of the year both in Europe and in the US, and the price moves could be exaggerated with low trading volumes."

Markets mixed, Korean aviation sector in focus

In South Korea, the Kospi 100 fell 0.43% to 2,395.42, pressured by a sharper-than-expected contraction in November industrial output and the aftermath of Sunday's Jeju Air crash, which claimed 179 lives.

Jeju Air shares plunged 8.65% to a record low.

Other airlines, including Korean Air and T'way Air, also saw losses, though Air Busan gained 3.14%.

The government had ordered urgent safety inspections, adding to uncertainty in the aviation sector.

Elsewhere, Japan's Nikkei 225 dropped 0.96% to 39,894.54, while the Topix declined 0.6%.

Declines in automotive and industrial stocks, including Nissan Motor, down 5.73%, and Japan Steel Works, off 4.94%, led the losses on Tokyo's benchmark.

In China, markets bucked the regional trend - the Shanghai Composite rose 0.21% to 3,407.33, and the Shenzhen Component edged up 0.1% to 10,671.16.

Gains in Shanghai were driven by a rally in select stocks, with Shanghai Guangdian Electric Group, Arcplus Group, and Inesa Intelligent Tech all surging over 10%.

Hong Kong's Hang Seng Index slipped 0.24% to 20,041.42.

Losses in the special administrative region were led by Haidilao International, down 5.49%, and Sands China, off 5.06%.

In Australia, the S&P/ASX 200 fell 0.32% to 8,235.00.

Property and real estate stocks dragged the index lower, with Growthpoint Properties Australia losing 5.1%.

Across the Tasman, New Zealand's S&P/NZX 50 outperformed, gaining 0.49% to 13,270.01, supported by strong performances from Contact Energy, rising 5.72%, and Ryman Healthcare, which closed 4.53% firmer.

In currency markets, the dollar was last 0.03% stronger on the yen to trade at JPY 157.91, while it weakened 0.11% against the Aussie to AUD 1.6068, and retreated 0.26% from the Kiwi, changing hands at NZD 1.7700.

Oil prices were near flat, with Brent crude futures last up 0.05% on ICE at $74.21 per barrel, and the NYMEX quote for West Texas Intermediate ahead 0.06% to $70.64.

Industrial output falls more than expected in Korea, Japan factory activity shrinks

In economic news, South Korea's industrial output fell 0.7% month-on-month in November, exceeding the 0.4% decline forecasted by Reuters.

On an annual basis, production rose a modest 0.1%, falling short of expectations for a 0.4% increase and a sharp deceleration from October's robust 6.3% growth.

The disappointing data came amid escalating political instability following the impeachment of acting president Han Duck-soo.

That followed the impeachment of president Yoon Suk-yeol, whose brief martial law decree plunged the nation into crisis.

On Monday, authorities reportedly sought an arrest warrant for Yoon, deepening uncertainty.

In Japan, factory activity continued to shrink in December, though at a slower rate.

The au Jibun Bank manufacturing purchasing managers' index (PMI) rose to 49.6 from 49.0 in November, marking the mildest contraction in three months.

Despite the improvement, the reading remained below the 50-point benchmark that separates expansion from contraction, reflecting ongoing challenges in the manufacturing sector.

Traders were now looking to China, where the release of December manufacturing PMI data on Tuesday was expected to provide further insight into the region's economic momentum.

Reporting by Josh White for Sharecast.com.