Nikkei loses early gains; Hong Kong's Tencent falls into correction territory
Stocks largely returned to positive territory in late-session trading in the Asia-Pacific Friday, with Chinese equities recovering from early declines.
After opening slightly lower, Shenzhen stocks -- where smaller companies are generally listed, as opposed to more industrial-focused and state-owned firms in Shanghai -- led the move higher.
The Shenzhen Composite was up 0.9% ahead of the close, while the ChiNext jumped 2.1%. In comparison, the Shanghai Composite was dow 0.1% after logging its worst month of the year in November.
For the Shenzhen market, "it's quite reasonable for it to move higher given the recent pullback," said Dickie Wong, executive director of research at Kingston Securities. Chinese stocks have seen several notable declines over the past week.
Hong Kong's Hang Seng remained under pressure, mostly due to weakness in Tencent (0700.HK) a primary cause. The Chinese internet giant fell another 2.8%, putting it into correction territory with a 12% decline from last week's latest record high. The Hang Seng was recently down 0.3%.
In Japan, the Nikkei Stock Average closed up 0.4% but well off the session's best levels. The Tokyo market was hit by news that the U.S. Senate wouldn't vote on the Republicans' tax-reform proposal until at least Friday. That briefly hurt the dollar and saw the Nikkei fall as much as 0.4%.
Sentiment in the region toward Asian equities was broadly upbeat thanks to fresh record highs in the U.S. Thursday amid tax-reform optimism.
As the Dow industrials capped its eighth-straight month higher Thursday, the longest winning streak in 22 years, "equities in the U.S. are like a runaway freight train," said Tim Kelleher, head of institutional foreign-exchange sales at ASB Bank in New Zealand.
But he added the overnight gain might be viewed skeptically as some of it could be attributed to end-of-month positioning.
S&P 500 futures were recently down 0.2%.
It has been a tough week for tech stocks globally. That's especially the case for Samsung (005930.SE) , which lost 8.3%, its worst week in 5 1/2 years. More broadly, Korea's Kospi ended down a point while Taiwan's tech-heavy Taiex rebounded 0.4% after weakness early Friday.
The day's initial volatility might be something that investors need to get used to.
Wendy Liu, head of China equity research at Nomura, said that the outlook on growth, expectations the Federal Reserve will keep raising interest rates and elevated valuations make it likely that volatility will increase into year-end.
Oil prices rose in Asia as investors continued to react to the Organization of the Petroleum Exporting Countries and Russia agreeing to extend production curbs. The decision had been expected by the market. U.S. and Brent futures were both up about 0.4%.
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(END) Dow Jones Newswires
December 01, 2017 03:11 ET (08:11 GMT)