Asia report: Markets mixed as Japanese manufacturing contracts again

Markets in Asia finished mixed on Thursday, with stocks in Japan marginally higher after the country’s manufacturing activity contracted for the fourth month in a row.

In Japan, the Nikkei 225 was ahead 0.05% at 20,628.01, as the yen strengthened 0.06% against the dollar to last trade at JPY 106.56.

Of the major components on the benchmark index, automation specialist Fanuc was up 0.33%, while fashion firm Fast Retailing lost 0.38% and technology conglomerate SoftBank Group slid 1.06%.

Manufacturers were mixed on the back of fresh data for the sector, with Kawasaki Heavy Industries up 0.84% and Komatsu ahead 0.24%, while Mitsubishi Heavy lost 0.15%.

Electronics producers, meanwhile, were broadly lower, with Fujitsu down 1.36%, Renesas Electronics off 2.35% and Sony losing 2.4%.

The broader Topix index eked out gains of 0.04% to end its trading day at 1,498.06.

In data, the Jibun Bank Flash Japan Manufacturing purchasing managers’ index (PMI) rose to a seasonally-adjusted 49.5 on Thursday, from a reading of 49.4 a month earlier.

It was still below the 50.0 level, which is the difference between contraction and expansion in the sector, for the fourth month on the trot.

On the mainland, the Shanghai Composite was 0.11% firmer at 2,883.44, and the smaller, technology-heavy Shenzhen Composite reversed earlier losses to finish 0.11% higher at 2,883.44.

South Korea’s Kospi was 0.69% lower at 1,951.01, while the Hang Seng Index in Hong Kong was 0.84% weaker at 26,048.72.

Both of the blue-chip technology stocks were weaker in Seoul, with Samsung Electronics down 1.01% and SK Hynix losing 2.64%.

Sentiment was middling at the start of the Asian day, as markets put in a muted reaction to the release of the Federal Reserve’s July minutes overnight.

The release revealed that the Fed officials who voted in favour of lower interest rates last month were in agreement that the move was not an indication of a “pre-set course” for further easing.

Oil prices were higher as the region went to bed, with Brent crude last up 0.9% at $60.85 per barrel, and West Texas Intermediate 1.03% higher at $56.26.

In Australia, the S&P/ASX 200 was up 0.29% at 6,501.80, with the energy subindex in the green.

Of the major energy plays in the sunburnt country, Oil Search was up 0.77%, Santos was 3.5% firmer, and Woodside Petroleum was 0.59% higher.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was up 0.1% at 10,725.22, with flag carrier Air New Zealand adding 1.5% after posting decent earnings estimates and maintained its dividend.

Both of the down under dollars were weaker on the greenback, with the Aussie last 0.25% weaker at AUD 1.4785, and the Kiwi retreating 0.39% to NZD 1.5675.