Reuters Insider - Asia Insight: Stocks advance after Wall Street's recovery continues, but Japan remains a worry

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28/12/2018 11:18

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Source: Reuters Insider

Description: Asian stocks advanced on Friday after Wall Street ended volatile
trade in positive territory, adding to the previous session's big
gains.
Japan's industrial output contracted in November, while retail sales
slowed sharply as increasing global risks drag on demand and threaten the
country's export-reliant economy.
Short Link: https://reut.rs/2LH8QjO

Video Transcript:

Hello and welcome to your Asia Insight. I'm Nawied Jabarkhyl. Asian stocks
picked up the pace again on Friday, following Wall Street's lead overnight.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.8%. Even so,
the index has fallen 3% so far in December. Shanghai's blue chip CSI 300 also
gained after the authorities allowed banks to set up new wealth management
companies and as investors expect more government support after New Year's
Day. The Nikkei bucked the trend ending the day lower after rising almost 4%
on Thursday. Japan's industrial output fell in November while retail sales
slowed sharply. The 1.1% decline in output wasn't as bad as some economists
had expected but does expose the fragility of the country's export-led
economy. Adding to concerns about Japan is demand to private consumption which
accounts for about 60% of the economy, shows little sign of strength either.
China and the United States are planning face-to-face consultations over trade
in January. The meeting would be the first direct talks since US President
Donald Trump met Xi Jinping in Buenos Aires at the beginning of December. The
two agreed to stop escalating tit-for-tat tariffs that have disrupted the flow
of hundreds of billions of dollars of goods between the two nations. Earlier
this week, China attempted to ease at least one area of tension, is proposing
a ban on forced technology transfers and illegal government interference in
foreign business operations. However, it will retain what it calls a negative
list where foreign investments will be curbed or restricted. Before the end of
March next year, we will fully clean up and cancel market barriers for foreign
investment in areas outside the negative list. 

We will create the same standards for domestic and foreign investors in
permitted areas. This is beneficial towards standardizing government behavior
and creating a fair competitive market environment. 

Let's take a look at some companies in the news. Nissan is to make fewer cars
in China in the coming months as demand slows. Sources say the Japanese
carmaker will reduce output by around 30,000 vehicles. Slowing economic growth
and the crippling trade war with the United States have pummeled vehicle sales
in the past few months. China has hit back at suggestions the United States
could order a total ban on companies buying Huawei and ZTE equipment. Beijing
says the idea would be an act of "shutting itself off rather than one of
openness or fairness." Sources from the telecoms industry and the
administration say the executive order which has been under consideration for
more than eight months could be issued as early as January. Sources have told
Reuters that Taiwan's Foxconn will begin assembling some top-end iPhones in
India in 2019. They say the work will take place at Foxconn's plant in the
southern state of Tamil Nadu. It will spend around $315 million to expand
facilities and could create as many as 25,000 jobs. Foxconn already assembles
Xiaomi phones at the plant. China's Unipec, the trading arm of petroleum and
chemicals giant Sinopec says it's facing losses because of falling oil prices.
On Thursday, the company suspended two top officials. One source telling
Reuters that they had made seriously wrong judgments on the market. Benchmark
Brent and West Texas Intermediate Oil prices have fallen by about 40% since
hitting four-year highs in October, mainly on concerns about oversupply. And
finally, banking services of branches of state-run lenders across India being
disrupted because of a strike by unions against the proposed merger of three
banks in the country - Vijaya, Dena, and Bank of Baroda. Staff are protesting
on the ground of the likely impact of job losses and branch closures that are
also asking for higher wages. Strikers are demanding a meeting with finance
minister Arun Jaitley to try to resolve the issue. That's it from your Asia
Insight. I'm Nawied Jabarkhyl and this is Reuters