Asia report: Hang Seng leads sharp losses across region

Trading in Asia saw sharp losses on Wednesday, in stark contrast to Tuesday’s session, with the Hang Seng sliding more than 3% in Hong Kong to lead the falls.

In Japan, the Nikkei 225 was down 1.5% at 26,173.98, as the yen strengthened 0.16% against the dollar to last trade at JPY 144.57.

Automation specialist Fanuc was down 2.89%, fashion firm Fast Retailing lost 4.23%, and technology conglomerate SoftBank Group was 1.83% weaker.

The broader Topix index was off 0.95% by the end of trading in Tokyo, settling at 1,855.15.

Minutes from the Bank of Japan’s July meeting were released on Wednesday, with the bank expecting consumer inflation excluding fresh food to rise through this year, before slowing on the back of energy prices.

Some of the central bank’s members also believed inflation, discounting fresh food and energy, was unlikely to reach 2% within their projections.

“These members expressed the view that, unless commodity prices continued to rise, the CPI inflation rate was expected to decline from fiscal 2023 onward,” the bank’s minutes read.

On the mainland, the Shanghai Composite was 1.58% lower at 3,045.07, and the technology-heavy Shenzhen Component slid 2.46% to 10,899.70.

Han Baojiang, director of the Chinese Communist Party’s economics department, said during the day that renminbi would probably return to a “reasonable range” of between CNY 6 and CNY 7 against the US dollar as quickly as next year.

According to CNBC’s translation of his remarks to the All-China Journalists Association, Baojiang said the depreciation of the yuan was linked to the economic difficulties being faced in the People’s Republic.

Answering a separate question, he also said that Chinese president Xi Jinping would underline a message of post-Covid reopening at the National Congress next month.

During the session, both the offshore and onshore yuan reached their weakest levels since 2008, pushing past the CNY 7.2 level.

South Korea’s Kospi was 2.45% weaker at 2,169.29, while the Hang Seng Index in Hong Kong tumbled 3.41% to 26,173.98.

The blue-chip technology stocks were on the back foot in Seoul, with Samsung Electronics down 2.4% and SK Hynix losing 0.98%.

Oil prices were higher at the end of the Asian day, with Brent crude last up 0.81% on ICE at $86.97 per barrel, and West Texas Intermediate rising 0.85% on NYMEX to $79.17.

“Overnight, China’s internationally-traded yuan fell to the lowest level on record against the US dollar, on the back of a strengthening greenback,” said Interactive Investor head of investment Victoria Scholar about the region’s situation on Wednesday.

“Asian equities had a tough session with the Hang Seng index shedding more than 3% while the Hang Seng Tech index nursed even heavier losses.

“Oil prices are trading lower with WTI and Brent crude shedding more than 2% each, pressured by the strength of the US dollar and concerns about global demand.”

In Australia, the S&P/ASX 200 slipped 0.52% to 6,462.00, while across the Tasman Sea, New Zealand’s S&P/NZX 50 lost 0.85% to 11,119.57.

The down under dollars were both weaker against the greenback, with the Aussie last off 0.24% at AUD 1.5578, and the Kiwi retreating 0.03% to NZD 1.7740.

Reporting by Josh White at Sharecast.com.