SYDNEY (BLOOMBERG) - Asian stocks headed for their biggest weekly loss in four on Friday (Oct 14)as investors waited for Chinese inflation data after disappointing export figures. Thailand's market will be closely watched following the death of King Bhumibol Adulyadej, the world's longest-reigning monarch.
The MSCI Asia Pacific Index fell 0.1 per cent to 137.81 as of 9am in Tokyo, taking its loss this week to 2 per cent, amid more than a six in ten chance of a US interest-rate increase before year-end. After digesting the export data that missed estimates, eyes are on consumer and producer prices to be released later on Friday.
Japan's Topix index added 0.3 per cent as the yen fell against the US dollar. Australia's S&P/ASX 200 Index Index gained less than 0.1 per cent, South Korea's Kospi index added 0.6 per cent and New Zealand's S&P/NZX 50 Index climbed 0.1 per cent. Futures contracts on Hong Kong's Hang Seng Index and FTSE China A50 Index both advanced 0.3 per cent.
The baht rose along with an exchange-traded fund tracking Thailand's shares after the monarch's death was announced on Thursday evening in Bangkok, with equities yet to open on Friday.
"The Chinese producer-price inflation number is really key for me now," Chris Weston, Melbourne-based chief market strategist at IG Ltd., said by phone. "You are seeing a situation where the Chinese are exporting their deflation around the world. That could send emerging markets a little bit lower."
Economists forecast China's consumer prices will rise 1.6 per cent in September, up from 1.3 per cent the previous month, while producer prices are expected to decline 0.3 per cent after a 0.8 per cent drop in August.
Thailand's stock market rebounded with the currency on Thursday, closing higher before the king's death was announced, while the iShares MSCI Thailand Capped ETF climbed by the most since February in the US. Earlier in the week, Thai assets had tumbled after the royal palace said Sunday that King Bhumibol's health was "unstable." Futures on the SET Index gained 3.4 per cent on Thursday.
"Short-term investor confidence has been and could remain shaken," Jingyi Pan, a market strategist at IG Asia Pte in Singapore, said before the king's death was announced on Thursday. "Defensive stocks may appear appealing in the near term given the reaction of the markets, while a smooth transition could help to trigger a reversal in the battered SET index."
Futures on the S&P 500 Index were little changed. The underlying measure lost 0.3 per cent on Thursday in a volatile session amid fresh concern that tepid global growth will weigh on the American economy. The CBOE Volatility Index, a gauge of US stock options prices, climbed to the highest level in a month.
Equity investors will be watching earnings reports on Friday from JPMorgan Chase & Co, Citigroup and Wells Fargo for clues on the health of the world's largest banks as the US reporting season ramps up.