Asia report: Markets mixed amid US military exercises, Bannon quits

Markets in Asia finished mixed on Monday, as investors were faced with political and military movements in the US and the Korean peninsula.

In Japan, the Nikkei 225 was down 0.4% at 19,393.13, as the yen strengthened on the dollar, last advancing 0.06% to JPY 109.11.

On the mainland, the Shanghai Composite was up 0.57% to 3,287.32, and the smaller, technology-centric Shenzhen Composite was 0.75% higher at 1,916.42.

Major China telecoms operator China Unicom announced on Sunday it was planning to raise $11.7bn as it pivoted to a mixed ownership structure, with $9.25bn of those funds coming from a private placement.

The company withdrew its initial announcement over the plans from the Shanghai Stock Exchange earlier last week, after the confusion it caused was highlighted in a number of media reports.

China Unicom’s Hong Kong listed shares were higher on Monday, leaping by as much as 10% during the session.

South Korea’s Kospi was down 0.14% at 2,355.00, while the Hang Seng Index was ahead 0.4% at 27,154.68.

Geopolitical tensions were once again at the fore, as the annual joint military exercises between South Korea and the United States kicked off.

The drill, which were set down to take place between 21 and 31 August, were causing particular jitters as they came at the end of one of the most heated wars of words between Washington and Pyongyang in years.

Political movements in the US were also high on the agenda, after the White House’s controversial chief strategist Steve Bannon left his post late on Friday.

Reports emerged over the weekend that Bannon had tendered his resignation earlier in the month, but it was pushed back due to recent white supremacist violence in Virginia.

“From a market perspective ... Bannon's departure doesn't change Trump's strong views on immigration, border security and trade protection,” noted National Australia Bank currency strategist Rodrigo Catril.

Oil prices were mixed, with Brent crude last down 0.11% to $52.66 per barrel and West Texas Intermediate rising 0.25% to $48.63.

In Australia, the S&P/ASX 200 was off 0.37% at 5,725.85, led lower by the healthcare and telecommunications subindexes, while the weighty financials sector was off 0.29%.

Major miner Fortescue Metals reported a 113% surge in net profits for the year to 30 June on Monday, leading to a 6.36% improvement in its share price through the session.

Australia-based steel firm Bluescope plunged 21.83%, after it adjusted its earnings outlook weaker as a result of lower margins in the US and more intense competition.

New Zealand’s S&P/NZX 50 was off 0.07% at 7,867.78, led lower by retirement housing and care unit operator Metlifecare, which was off 1.7%, while subscription broadcaster Sky - not related to its London-listed namesake - was down 1.6%.

It was a mixed picture for the down under dollars, with the Aussie last 0.03% weaker against the greenback at AUD 1.2615, while the Kiwi 0.01% stronger at NZD 1.3673.