Asian stocks ended mixed in cautious trading on Monday as investors digested soft Chinese industrial profits data and looked ahead to some key data this week from China and Japan to gauge the outlook for regional growth. Traders also await Eurozone inflation and U.S.jobs data this week to see if the currency markets will fall victim to policy divergence between the U.S. Federal Reserve and the European Central Bank.
Chinese shares rose modestly as notable gains among technology stocks helped offset concerns over the economy. Profits earned by Chinese industrial enterprises declined 8.8 percent year-over-year in August, the most in at least four years and down from the 2.9 percent fall in July, official data showed, rekindling growth worries. The benchmark Shanghai Composite index closed up 8.41 points or 0.27 percent at 3,100.76 after falling as much as 1.6 percent early in the day.
Trading activity was relatively thin as investors looked ahead to the official September purchasing manufacturing managers' index (PMI) and the final Caixin/Markit PMI, both due on Thursday. Also, the Chinese market will be closed for one week starting Thursday for the National Day Golden Week holidays.
Japanese shares fell sharply as the safe-haven yen strengthened against major peers and a raft of stocks traded ex-dividend. Also, caution crept in ahead of industrial production and corporate sentiment data scheduled this week. The benchmark Nikkei index closed down 235.40 points or 1.32 percent at 17,645.11 after rallying 1.8 percent on Friday. The broader Topix index of all first-section shares fell 1.04 percent to 1,438.67.
A stronger yen weighed on export-oriented stocks, with Canon, Honda Motor, Toyota, Mazda Motor, Fanuc and Sony falling 1-4 percent. Suzuki Motor dropped 2.2 percent after selling its entire 1.5 percent stake in Volkswagen AG to Porsche Automobil Holding SE. Nippon Paper Industries slumped 4.3 percent on a Nikkei report that its April-Sept operating profit has likely dropped about 30 percent. Steelmaker JFE Holdings lost 4.3 percent, brokerage Nomura Holdings shed 3.5 percent and oil refiner JX Holdings fell 2.8 percent.
Australian shares closed firmly in positive territory, as sharp gains in beaten-down banking stocks outweighed weakness in the mining sector. The benchmark S&P/ASX 200 rose 71.4 points or 1.42 percent to 5,113.5, while the broader All Ordinaries finished up 68.4 points or 1.35 percent at 5,145.1. ANZ rallied 1.5 percent, Commonwealth climbed 1.8 percent, NAB advanced 1.7 percent and Westpac added a percent. Mining giant Rio Tinto shed 0.4 percent and Fortescue Metals Group dropped 0.8 percent, while BHP Billiton gained 1 percent.
Gold miner Newcrest slid 0.7 percent and rival Evolution Mining eased 0.4 percent. Gold held steady in Asian deals after snapping a two-day gain to end lower on Friday. Oil & gas stocks turned in a mixed performance, with Santos rising 1.3 percent and Woodside Petroleum climbing 2.9 percent, while Oil Search declined 0.7 percent. M2 Group soared 13.4 percent while Vocus Communications fell 7.4 percent after they announced a merger.
New Zealand shares posted modest gains in thin trade in line with the gains across the Tasman. The benchmark NZX-50 index rose 11.78 points or 0.21 percent to 5,699.13, with Xero shares climbing 3.8 percent to $15.10 after the cloud accounting software provider increased fees for New Zealand customers.
Elsewhere, India's Sensex was down 0.3 percent in range-bound trade ahead of the Reserve Bank of India policy review tomorrow. Indonesia's Jakarta Composite index was down 1.8 percent, Malaysia's KLSE Composite index was declining 0.4 percent and Singapore's Straits Times index was losing 1.4 percent, while financial markets in South Korea, Hong Kong and Taiwan were closed for public holidays.
On Wall Street, stocks ended mixed on Friday after athletic shoe giant Nike posted strong first-quarter income in greater China and Federal Reserve Chair Janet Yellen reassured that the U.S. economy is stable enough to handle turmoil in emerging markets.
Economic reports were mixed, with the U.S. economy expanding more than previously estimated in the second quarter, powered by stronger consumer spending and construction, while the University of Michigan's final index for September on overall consumer sentiment came in markedly below last month's level.
While the Dow rose 0.7 percent, the S&P 500 edged down marginally and the tech-heavy Nasdaq dropped 1 percent, dragged down by biotechnology stocks following Democratic presidential candidate Hillary Clinton's tweet about her proposal to control drug prices.
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