ASIA MARKETS: Asia Stocks Mostly Lower, But China Outperforms

By Jake Maxwell Watts

Chinese shares outperformed the region, as a week-long spike in interbank lending rates settled Friday, easing concerns about the health of China's financial system.

The Shanghai Composite rose 1% to 2,093.4, while Hong Kong's Hang Seng Index was up 0.2%, helped by gains in heavyweight technology companies Tencent Holdings Ltd. (0700.HK) and China Mobile Ltd. (CHL), which added 1.8% and 0.4% respectively.

The benchmark rate Chinese banks charge each other to borrow was at 5.06%, down from 5.33% Thursday, providing relief to investors looking for liquidity in the market at a time of year in which companies and banks are trying to shore up their balance sheets for year-end reports.

Elsewhere in the region, Japanese stocks broke a seven-session rally and the yen (USDJPY) strengthened against the U.S. dollar Friday, underperforming the rest of Asia after data releases failed to inspire investors.

The Nikkei Stock Average fell 0.3% to 16,133.9, retreating from a six-year high, and the yen strengthened 0.1% to change hands at Yen104.86.

Early data from Japan showed consumer prices rising 1.2% on-year in November, above the 1.1% increase expected by economists. That marked the sixth straight month of price rises and brought the country closer to the 2% inflation target pledged by the government and the Bank of Japan. Strong inflation data should push up expectations that the economy is back on track, reducing the chance that the Bank of Japan would increase its stimulus measures to weaken the yen further than it has already.

Other data showed that industrial production rose 0.1% on month in November, below the 0.3% rise expected by economists. Retail activity accelerated, with sales growing 4% from a year earlier.

Despite the broader fall, many large-cap stocks still gained. Telecommunications provider SoftBank Corp. (9984.TO) was 1.7% higher, extending previous gains linked to reports that the company was preparing to turn to the U.S. bond market to raise more than Yen2 trillion ($19 billion) to acquire U.S. mobile carrier T-Mobile US (TMUS) .

Among Japanese losers were Fast Retailing Co. (FRCOY), down 2.2%, and Takeda Pharmaceutical Co. (TKPHF), which lost 5% a day after announcing that it would stop producing fasiglifam, a diabetes drug, due to concerns about patients' liver safety.

Other stock indexes were mixed Friday. Korea's Kospi lost 0.2% to 2,002.7, while New Zealand's benchmark was down 0.1%.

Australia's S&P/ASX 200 was trading up 0.2% on the strength of stocks such as miner Rio Tinto Ltd. (RIO), which gained 1.1%.

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