Asia report: Markets mixed as investors take a breather

Markets in Asia finished in a mixed state on Friday, as investors climbed down from the vaccine-fuelled enthusiasm that underpinned trading earlier in the week.

In Japan, the Nikkei 225 was down 0.53% at 25,385.87, as the yen strengthened 0.07% against the dollar to last trade at JPY 105.05.

Fashion firm Fast Retailing was up 3.49%, while among the benchmark’s other major components, automation specialist Fanuc lost 3.82% and technology conglomerate SoftBank Group was off 0.18%.

The broader Topix index lost 1.33% by the end of trading in Tokyo, to settle at 1,703.22.

On the mainland, the Shanghai Composite was down 0.86% at 3,310.10, and the smaller, technology-heavy Shenzhen Composite lost 0.22% to 2,268.67.

South Korea’s Kospi rose 0.74% to 2,493.87, while the Hang Seng Index in Hong Kong slipped 0.05% to 26,156.86.

Chinese technology giant Tencent rocketed 4.33% in the special administrative region, however, a day after it reported an 80% year-on-year improvement in quarterly profit.

The blue-chip technology stocks were firmer in Seoul as well, with Samsung Electronics up 3.61% and SK Hynix adding 1.82%.

The Covid-19 pandemic continued to be atop the minds of traders, as daily cases continued to set new records in the United States.

Federal Reserve chair Jerome Powell warned overnight that the coming months could be “challenging”, even with the news earlier in the week that the vaccine being developed by Pfizer and BioNTech had achieved 90% effectiveness.

“From our standpoint, it’s just too soon to assess with any confidence the implications of the news for the path of the economy, especially in the near term,” Powell said on the vaccine.

The news from Pfizer and BioNTech saw markets skyrocket globally earlier in the week.

“There is some de-risking going on into the weekend,” said Axi chief global market strategist Stephen Innes.

“The dollar is modestly higher, the US Treasury 10-year yield is down about nine basis points over the past 24 hours, and Asia’s equity markets followed their US peers lower.”

Innes noted that tighter monetary policy had been mooted in China in the past week, with People's Bank of China deputy governor Liu Guoquiang saying that “exit [from stimulus programmes] is a matter of time and it is also necessary”.

“[However[, comments from the Bank of England, European Central Bank, and the Federal Reserve at an ECB-hosted conference on Thursday suggest monetary policy will remain ultra-accommodative for some time,” Innes noted.

“For instance, Fed Chair Powell noted an “economy continuing on a solid path of recovery, but the main risk we see to that is clearly the further spread of the disease here in the United States”.”

Oil prices were lower as the region entered the weekend, with Brent crude last down 0.6% at $43.27 per barrel, and West Texas Intermediate losing 0.92% to $40.74.

In Australia, the S&P/ASX 200 was off 0.2% at 6,405.20, while across the Tasman Sea, New Zealand’s S&P/NZX 50 advanced 0.23% to 12,700.17.

The down under dollars were in a mixed state against the greenback, with the Aussie last 0.32% stronger at AUD 1.3782, while the Kiwi weakened 0.14% to NZD 1.4637.