Asian shares mixed on BOJ decision, China’s child policy change 

Asian shares mostly regained their footing on Friday, following the Bank of Japan’s (BOJ) decision to stand pat on its monetary policy and as China‘s scrapping of its one-child policy bolstered dairy and baby products makers.

Major U.S. averages finished lower overnight, with the Nasdaq Composite leading declines with a 0.4 percent fall. The blue-chip Dow Jones Industrial Average ticked down 0.1 percent, while the S&P 500ended little changed.

Nikkei up 0.8%

Japan’s Nikkei 225 index settled at a two-month high amid choppy trade, following the BOJ’s decision to not expand its massive stimulus program despite cooling inflation in the world’s third-biggest economy.

The core consumer price index, which includes oil products but excludes fresh food prices, dipped 0.1 percent in September from the year-ago period, official data showed, worse than expectations for a 0.2 percent annual gain.

Household spending for September fell 0.4 percent on-year, against Reuters’ estimate for a 1.2. percent rise. Meanwhile, the jobless rate for September was unchanged from the previous month at 3.4 percent, in line with expectations.

Meanwhile, the Nikkei newspaper reported on Friday that the government is planning a supplementary budget of over 3 trillion yento build nursing-care facilities and lend support to farmers who may be affected by the Trans-Pacific Partnership (TPP) trade pact.

On the corporate earnings front, Sony rebounded 0.4 percent after swinging to a second-quarter operating profit on the back of strong PlayStation 4 video game sales.

Nippon Steel & Sumitomo Metal gained 0.6 percent despite lowering its profit forecast for the year through March 2016 and cut its production target for the October-March period. Rival JFE Holdingsclosed up 2.4 percent, paring early losses, after cutting its guidance and production forecast.

Baby bottle maker Pigeon jumped 10.7 percent, while toiletry goods maker Kao and personal care goods maker Unicharm rose more than 3 percent each, thanks to Beijing’s easing of family planning restrictions. By contrast, Japan’s dominant condom maker Okamoto Industries slid 10.1 percent on fears that the new ruling may dent Chinese demand for its products.

Shionogi & Co leaped as high as 15 percent to its highest since August 20, following a Nikkei report that the company is expected to release first one-day treatment for influenza in Japan as early as 2018.

China markets rebound

Share markets in China rebounded mid-Friday, with the key Shanghai Composite index advancing 0.5 percent.

Financials were in focus amid earnings releases. The country’s biggest brokerage Citic Securities climbed 5 percent after delivering a rise of 54 percent in third-quarter earnings.

Bank of China, which announced a profit fall in the third quarter, added 0.3 percent. China Construction Bank – the mainland’s second-biggest lender by assets – ticked up 0.2 percent after reporting flat profit growth for the third quarter as bad debt rose.

Among other indexes, the blue-chip CSI300 gained 0.5 percent while the Shenzhen Composite bobbed up 0.6 percent. Hong Kong’s Hang Seng index headed down 0.4 percent.

China Huarong Asset Management gained 0.3 percent to trade at HK$3.100 in its stock market debut, versus its IPO price of HK$3.09, after raising $2.3 billion in the city’s largest initial public offering (IPO) in 2015.

Meanwhile, Hong Kong-listed baby goods-related counters. Skin care products maker China Child Care Corporation soared 20 percent, while infant formula milk maker Yashili International Holdings soared 8 percent. Baby stroller maker Goodbaby International Holdings and dairy products maker China Mengniu Dairy Company surged more than 5 percent each, while diaper maker Hengan International Group leaped 2.1 percent.

“The end of the one-child policy is good for the community and related industries, such as baby strollers and milk formula companies. There’s not much surprise though, as there has been speculation in the market hence the surge is likely only in the short-term,” Dickie Wong, executive director of Kingston Securities, told CNBC on Friday.

Leave a Comment