Asia report: Markets quiet as Aussie retail sales disappoint

Markets in Asia finished mixed but little changed, with much focus turned down under as retail sales data showed Australian consumers were becoming more hesitant with their wallets.

In Japan, the Nikkei 225 was up just 0.01% at 20,628.56, as the yen gained on the dollar, last advancing 0.26% to trade at JPY 112.47.

Markets in mainland China, Hong Kong and South Korea remained closed for public holidays as the quiet week in Asia continued.

Oil prices were lower during Asian trading, but picked up again as Europe took the baton, with Brent crude last up 0.62% at $56.15 per barrel and West Texas Intermediate adding 0.2% to $50.08.

In Australia, the S&P/ASX 200 was down 0.01% at 5,651.77, as fresh data revealed retail turnover was down 0.6% in August - the worst decline in sales since the beginning of 2013.

It was also a big miss of forecasts, with a Reuters-polled estimate expecting a 0.3% pick-up in retail sales, and was accompanied by a revision of the July reading to a 0.2% fall.

“The big question for the outlook is why retail sales as a whole fell in August,” notes National Australia Bank economist Tapas Strickland.

“[Our] transaction data suggested this, however there was no obvious macro events to explain such weakness.

“Overall, the trend in retail is likely to remain subdued until wages begin to strengthen given debt levels and a hesitant consumer, while online retail will continue to challenge bricks and mortar retailers.”

According to the Australian Bureau of Statistics, there were falls in food retail, cafes, restaurants and takeaway foods, household goods and clothing, footwear and personal accessories.

Department stores did see an uptick, however.

Retail stocks in the sunburnt country were mixed after the data was released, with department store chain Myer down 1.3%, electronics and homewares giant Harvey Norman 0.52% softer and entertainment and electronics peddler JB Hi-Fi off 0.74%.

Grocery giants Metcash, Wesfarmers and Woolworths were all firmer, up 1.63%, 0.32% and 0.53% respectively.

Aside from the retail data, the country’s trade surplus came in at AUD 989m for August, well above forecasts for an AUD 875m surplus.

Across the Tasman Sea in New Zealand, the S&P/NZX 50 finished up 0.3% to hit a record high of 7,974.70.

It was led higher by dairy products exporter Synlait, which surged 7%, while its competitor A2 Milk gained 5.7%, leading to both stocks hitting record levels.

Both companies had recently gained registration for their brands and formulas under China’s newly-stringent food importation scheme, as sales to the People’s Republic soared.

Both of the down under dollars were weaker on the greenback, with the Aussie last losing 0.61% to AUD 1.2791 and the Kiwi retreating 0.24% to NZD 1.3985.