Asia report: Markets slip after MSCI China inclusion

Markets in Asia were mostly lower on Wednesday, after confirmation from MSCI that mainland China shares would be included in its emerging markets index on a gradual basis.

Japan’s Nikkei 225 was off 0.45% at 20,138.79, as the yen strengthened on the dollar, last advancing 0.08% to JPY 11.36.

The ongoing Toshiba circus entered its next act, as the ailing technology conglomerate announced it was favouring a consortium led by Innovation Network Corporation to take its valuable memory chip division.

Toshiba had spent several months trying to offload the unit in a bid to release cash, as it struggled with the losses caused by its US nuclear acquisition Westinghouse Electric.

It’s understood the consortium included the aforementioned INCJ, as well as Bain Capital Private Equity and the Development Bank of Japan.

Shares in Toshiba still finished lower, losing 2.18% on the Tokyo bourse.

On the mainland, the Shanghai Composite added 0.52% to 3,156.38, while the smaller, technology-concentrated Shenzhen Composite was 0.43% firmer at 1,887.19.

MSCI revealed it would add China A-shares to the MSCI Emerging Markets Index, having ignored the previous three applications by the country.

A total of 222 China A Large Cap stocks would be included from 2018, it confirmed.

South Korea’s Kospi finished down 0.49% at 2,357.53, while the Hang Seng Index in Hong Kong was off 0.45% at 20,138.79.

Oil prices were down during the Asian session, with Brent crude last off 0.2% at $45.93 per barrel, while West Texas Intermediate lost 0.07% to $43.48.

In Australia, the S&P/ASX 200 closed down 1.59% at 5,665.72, with the materials and energy subindexes pulling the benchmark lower, losing 2.5% and 2.57% respectively.

Of the major energy players, Santos was hit hard, losing 2.01%.

The big banks were also under pressure, with Australia and New Zealand Banking Group off 1.79% and National Australia Bank 2.94% softer.

Over the Tasman Sea in New Zealand, the S&P/NZX 50 lost 0.8% to close at 7,527.11, with the major banks also among the biggest losers in Wellington.

There, Australia and New Zealand Banking Group was down 2%, while Westpac Banking Corporation lost 2.2%.

Both of the down under dollars were weaker on the greenback, with the Aussie last off 0.18% at AUD 1.3216, while the Kiwi retreated 0.1% to NZD 1.3823.