By Daniel Inman
Asian stocks moved lower after China's leaders failed to provide
a clear direction on policy over the coming decade, while the
Nikkei's strong upward streak in the last two sessions came to a
halt.
Stocks in China in particular reacted badly to Tuesday's
conclusion of the Third Plenum - a four day meeting that will set
the course for the world's second-largest economy for the coming 10
years. The communique that followed the meeting called for fewer
investment restrictions and greater rights for farmers, but was
lacking in specific details.
Hong Kong's Hang Seng Index fell 1.3%, with Chinese companies
listed in the city falling sharply -- the Hang Seng China
Enterprises Index dropped 2%. The Shanghai Composite fell 0.9% in
the mainland.
China economic data have picked up in recent months, relieving
concerns over a slowdown earlier in the year. The Third Plenum was
important because it gave an opportunity for the new government to
present a plan on how it would reshape the economy in order to
achieve sustainable growth. The negative market reaction points
toward dissatisfaction over the lack of details after the
meeting.
More broadly, the U.S. provided Asia with a negative lead as
investors digested conflicting comments from two Federal Reserve
presidents over when the central bank may move to start reducing
its bond buying.
Australia's S&P ASX 200 fell 1% and South Korea's Kospi lost 1%.
Japan's Nikkei was down 0.2% after a 3.6% gain over the past two
sessions -- the market's largest two-day rise since early
September. The move higher in stocks was encouraged by a weakening
of the yen, which started to fall at the end of last week after a
strong U.S. October labor report gave the dollar some upward
momentum.
After weakening towards the Yen100-to-the dollar mark in the
past few days, the yen (USDJPY) strengthened in Asia and was last
at Yen99.50 compared with Yen99.63 late Tuesday in New York.
Salary data weighed on Australia after local wages, excluding
bonuses, rose by a seasonally adjusted 0.5% in the quarter that
ended in September -- lower than a 0.7% consensus. The Australian
dollar dipped as low as 92.83 U.S. cents but bounced back to 93.04
U.S.
The regional earnings season continues. In Tokyo, Sumitomo
Mitsui Financial Group (SMFJY) rose 1.5% after the bank raised its
full-year net profit forecast to Yen750 billion from Yen580
billion.
Also in Japan, Isuzu Motors (ISUZY) fell 0.7% after the
motor-vehicle maker cut its full-year sales guidance for fiscal
year 2013 by Yen100 billion, though it kept its operating profit
forecast of Yen180 billion unchanged.
Singapore Airlines rose 0.4% in Singapore after the carrier
reported a sharp rise in its fiscal second-quarter net profit,
though it warned that margins will be under pressure in the coming
months.
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