Asian stocks pressured by weak China data, but set for strong Nov

Investing.com-- Most Asian stocks kept to a tight range on Thursday after data from China pointed to sustained weakness in the region’s biggest economy, although most indexes were nursing strong gains for November. 

Easing fears of U.S. interest rate hikes, a dovish Bank of Japan and a touch of bargain buying were the key drivers of an Asian stock rally in November. But Chinese bourses largely lagged their peers in the month, on sustained concerns over a slowing economic recovery. 

China PMIs disappoint, stocks lag Asia in November 

China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose slightly on Thursday, as did the Hang Seng. Purchasing managers index data showed that Chinese manufacturing activity contracted more than expected in November.

Non-manufacturing activity logged its weakest monthly growth in 2023, while overall business activity also came closer to contraction territory, a trend last seen during the height of the COVID-19 crisis. 

The readings ramped up concerns over an economic slowdown in China, especially as the country grapples with worsening demand in its biggest export destinations. But traders also bet that the trend will attract more comprehensive stimulus measures from Beijing.

Still, Chinese stocks missed a rally in their Asian peers through November. The CSI 300 index was set to lose 2.1%, while the Shanghai Composite and Hang Seng were largely unchanged for the month. 

Broader Asian markets logged small gains on Thursday, but were still headed for a strong November. 

Australia’s ASX 200 rose 0.1%, as data showed new building approvals surged in October after a lull for most of the year. But other data showed private capital expenditure grew less than expected in the third quarter. 

The ASX was set to add about 3.9% in November.

Futures for India’s Nifty 50 index indicated a positive open, following a strong rally on Wednesday. Optimism over India’s economy- which is the fastest-growing major economy this year- put the Nifty on course for a 5.3% rise in November.

Focus was also on upcoming Indian gross domestic product data for the September quarter, which is expected to show strong, albeit slowing growth in the economy. 

Japan, South Korea lead Asian stocks in November

Japan’s Nikkei 225 index moved little on Thursday after mixed readings on retail sales and industrial production. But a dovish Bank of Japan and a slew of positive quarterly earnings put the Nikkei on course for a 7.9% spike in November, with the index also remaining close to a 33-year peak.

South Korea’s KOSPI was flat on Thursday after the Bank of Korea kept interest rates steady, as widely expected. Industrial production data missed expectations for October.

But the KOSPI was the best performer among Asian bourses for November, up 10.6% on strength in heavyweight technology stocks. The index had marked a nearly 6% intraday spike earlier in November, after the government banned short-selling in domestic markets.