Asia shares mixed after China data; Nikkei ends week nearly 2% lower

Asian stocks were mixed on Friday following a subdued Chinese inflation report and as traders kept a close eye on developments in eastern Ukraine.

Chinese consumer price inflation rose an annual 1.8 percent in April, coming in below estimates for a 2 percent gain and March’s 2.4 percent rise. Meanwhile, producer prices fell for the 26th straight month, dropping an annual 2 percent, worse than forecasts for a 1.8 percent decline.

“The continued downside surprise in CPI inflation suggests room for further policy easing. We maintain our view that the PBOC [People’s Bank of China] will likely ensure sufficient liquidity in the second quarter. We think interest rate cuts are likely if growth disappoints further in Q2, and that RRR cuts are likely but would require a further worsening in economic conditions,” said Jian Chang, China economist at Barclays Capital.

Pro-Russian separatists in the Donetsk region of Ukraine said their referendum to secede will go ahead as planned on Sunday, despite being urged to hold off by President Vladimir Putin. More street clashes are expected on Friday as Ukraine celebrates ‘Victory Day.’

Nikkei 0.2% higher

Japanese shares reversed early losses to rise above 14,200 points, extending gains into a second day. Still, the benchmark Nikkei posted a 1.8 percent fall for the week.

Toyota Motor gained 0.6 percent following a 1.5 percent slide earlier in the session after announcing that it expects net profit to fall 2.4 percent in the year to March 2015.

In other earnings news, Toshiba jumped over 1 percent after saying that it expects operating profit to climb 14 percent to a record high this business year. E-commerce firm Rakuten tumbled over 5 percent after operating income fell an annual 1.5 percent.

Canon jumped 2 percent after saying it plans to buy back up to 50 billion yen of its own shares.

Shanghai slips 0.2%

Mainland shares resumed their declines to end the week 0.7 percent lower. Weakness in property shares weighed on the benchmark Shanghai Composite on fears about a downturn in the sector. Real estate developers Poly Real Estate and Vanke fell over 1 percent each.

Agricultural Bank of China rose 0.4 percent after announcing a big preference share issue. The bank is looking to raise nearly $13 billion dollars in its Hong Kong filing, if regulators approve.

In Hong Kong, shares of Standard Chartered rose 0.3 percent after more than 40 percent of shareholders opposed the bank’s pay plan on Thursday following a drop in first-quarter operating profit.

ASX slips 0.3%

Australia’s benchmark S&P ASX 200 index gave up the previous day’s gains to end the week with a modest 0.1 percent gain. The index was little changed after the Reserve Bank of Australia reiterated its commitment to record low interest rates in its statement of monetary policy.

“The RBA continues to be marginally more upbeat on the domestic economy, but while fiscal drag still provides headwinds, there was a sizeable discussion around a number of uncertainties. Still, the lower inflation forecast seems pivotal here and the period of stable rates continues and thus the right call continues to be that the bank will leave rates on hold for the rest of the year,” said Chris Weston, chief market strategist at IG.

Envestra rallied 18 percent after Li Ka-shing offered $1.32 per share for the gas distributor through a consortium led by Cheung Kong Infrastructure.

Kospi up 0.3%

South Korean shares rose for a second day after the Bank of Korea left rates steady for the 12th straight month at its monetary policy meeting. For the week, the benchmark Kospi fell 0.2 percent – its third straight weekly loss.

Search engine Naver lost 2 percent after reporting a 17.9 percent annual decline in first-quarter net profit.

Emerging markets gain

The Philippines’ benchmark PSE Composite Index index rallied over 1 percent after the central bank left its benchmark rate steady on Thursday.

Indian shares climbed 2 percent on optimism ahead of next week’s general election results.

Source: CNBC