Asia report: Markets mixed as investors react to Fed minutes

Markets in Asia finished mixed on Thursday, as mainland China returned to the fray and traders reacted to the latest Federal Reserve minutes, released in the US overnight.

In Japan, the Nikkei 225 was down 1.07% at 21,736.44, as the yen strengthened 0.52% on the dollar to last trade at JPY 107.22.

On the mainland, the Shanghai Composite was ahead 2.17% at 3,268.73, and the smaller, technology-heavy Shenzhen Composite finished 1.88% higher at 1,771.96.

Markets in mainland China returned to trade after spending and extended Lunar New Year holiday closed since late last week.

South Korea’s Kospi was down 0.63% at 2,414.28, while the Hang Seng Index in Hong Kong fell 1.48% to 30,965.68.

The latest minutes from the US Federal Reserve were released overnight, with officials suggesting economic growth and faster inflation as reasons to continue raising interest rates.

“Our take is that the minutes reflect events prior to the jump in hourly earnings seen in the January Jobs report and also prior to the extra spending bill passed by congress early in February,” noted National Australia Bank senior currency strategist Rodrigo Catril.

“This would suggest that there is a good chance that the current FOMC thinking has evolved towards a more hawkish tone since.”

Oil prices were lower, with Brent crude last down 0.15% at $65.32 per barrel and West Texas Intermediate falling 0.33% to $61.48.

In Australia, the S&P/ASX 200 eked out gains of 0.12% to 5,950.90, with gains of 0.12% in the hefty financials subindex offset by losses of 1.32% in the energy sector.

Of the major financial plays in Sydney, Australia and New Zealand Banking Group added 0.21%, Commonwealth Bank of Australia advanced 0.43%, National Australia Bank was 0.48% higher and Westpac Banking Corporation finished ahead 0.48%.

Australian flag carrier Qantas finished up 5.88%, after the airline reported its highest-ever first half underlying profit before tax.

The figure rose 14.6% to AUD 976m for the six months to 31 December, and its statutory profit before tax was up 18% to AUD 607m.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was up 0.8% at 8,266.88, led higher once again by dairy products exporter A2 Milk, which was up 9.8%.

Investors were continuing to support the stock after it agreed a milk supply deal with New Zealand-based dairy giant Fonterra on Wednesday.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.2% at AUD 1.2787 and the Kiwi advancing 0.14% to NZD 1.3646.