Asian stocks retreat as China's growth spurt gets deepened by Reuters

By Stanley White and Tom Westbrook

TOKYO / SINGAPORE (Reuters) – Asian stocks fell on Thursday after soft economic data in China and Japan showed the trade war between Beijing and Washington that beat growth in some of the world's largest economies.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.3%. Japan's stock index fell further, dropping 0.8%.

Australia's S & P / ASX200 dried previous gains to be close to 0.5% higher, while Shanghai Blue Tile drew water, supported by expectations the dismal numbers would add to the stimulus.

European stock futures point to a flat open following recent increase. US futures fell 0.1[ads1]%, following a record high of the S&P 500 on Wednesday.

China's industrial production growth slowed sharply in October, with 4.7% year-on-year growth well below the 5.4% forecast. Investment growth hit record lows and retail sales also missed expectations.

"The weakness in investment and production would indicate that confidence is down," said Shane Oliver, chief economist at AMP Capital in Sydney.

"It puts more pressure on Chinese authorities to come to an agreement with Donald Trump on trade, just as President Trump's desire to be re-elected puts pressure on him to come to an agreement."

The weak figures also come as market confidence until a resolution is weakened, with a new poll by Reuters showing that most economists do not expect Washington and Beijing to establish permanent ceasefire in the coming year.

Trump did not offer any update on the progress of the talks in a political speech Tuesday. The Wall Street Journal reported on Wednesday that the talks had settled on farm purchases.

Meanwhile, the global fall from the dispute is expanding.

Data coming at 0700 GMT will reveal whether Germany has entered a technical recession, such as the forecast.

Japan's economic growth hit its slowest pace over a year in the third quarter as soft demand hit exports.

"Looking around the region, you have had some near-losses of recession – Korea has been one, Singapore has also been one and you have Hong Kong in a recession at the moment," said Sean Darby, global equity strategist at Jefferies in Hong Kong.

"So it is not good. It is not a cycle that leaves no scars," he said

Concerns about violent spirits as anti-government protests intensify in Hong Kong have also created investor sentiment.

Protesting paralyzed parts of Hong Kong for a fourth day on Thursday, forcing school closures and blocked freeways and other transport links in a marked escalation of unrest in the economic hub.

Hong Kong fell 0.8% on Thursday to a new month's low.

In foreign exchange markets, safe ports such as the Japanese yen and Swiss francs held gains.

The yen was quoted at 108.70 per dollar, close to a week's high. The Swiss franc traded at 0.9900 against the greenback, near the highest in more than a week.

The Australian dollar slipped to a month low on Thursday following a worryingly weak reading about employment and ignited speculation about yet another interest rate cut.

futures rose 0.6% to $ 62.76 a barrel while US West Texas Intermediate (WTI) crude rose 0.63% to $ 57.48 a barrel.

Yield on benchmark index rose to 1.8652% compared to the US close of 1.869% Wednesday.

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