Asia report: Markets lower as North Korea situation remains tense
Markets in Asia were in the red on Thursday, as investors remained concerned around tensions on the Korean peninsula, although the war of words between DC and Pyongyang did appear to cool slightly from the intensity seen earlier in the week.
AUD/USD
$0.6572
05:12 08/05/24
GBP/NZD
NZD2.0853
05:11 08/05/24
Hang Seng
18,552.77
10:35 07/05/24
Nikkei 225
38,303.39
09:30 07/05/24
USD/JPY
¥155.1625
05:12 08/05/24
In Japan, the Nikkei 225 was down 0.05% at 19,729.74, as the yen strengthened against the dollar, last advancing 0.26% to JPY 109.78.
Investors in Tokyo spent much of the session digesting news that core machinery orders had fallen for a third consecutive month.
Data for June showed a 1.9% softening in core machinery orders, which was well off expectations for a 3.7% improvement in the volatile reading.
Screen maker Japan Display was off 7.69%, as investors reacted to the company’s restructuring plan, which was released on Wednesday.
On the mainland, the Shanghai Composite was down 0.42% at 3,261.80, and the smaller, tech-heavy Shenzhen Composite lost 0.69% to 1,872.60.
South Korea’s Kospi was 0.38% lower at 2,359.47, while the Hang Seng Index in Hong Kong slid 1.13% to 27,444.00.
Shares in Hong Kong Exchanges and Clearing were down, even after it reported a 12.5% improvement in its second quarter net profit on Wednesday.
Analysts were wary of the company’s performance, with Deutsche Bank maintaining its ‘sell’ rating, pointing out that the above-expectations profit was the result of significant one-off gains.
Attention was still firmly focussed on the northern half of the Korean peninsula, and tensions between its leadership and the White House in the US, after Donald Trump told the belligerent state to expect “fire and fury” in response to any further threats against America.
Many analysts read the mood as having cooled off somewhat on Thursday, however, with National Australia Bank economist Tapas Strickland noting that “although risk aversion was felt in Europe, the toning down of language saw a recovery in the US.”
Oil prices were higher, with Brent crude last up 0.7% at $53.07 per barrel and West Texas Intermediate adding 0.46% to $49.79.
In Australia, the S&P/ASX 200 fell 0.08% to 5,760.92, with the hefty financials subindex and the energy sector both leading the losses.
Financial services major AMP reported a rise in half yearly profit on Thursday, which was up 4% to AUD 533m.
That was above market expectations, with a Reuters-polled forecast picking profits of AUD 514.5m.
Its net profit was lower than last year at AUD 445m, compared to AUD 523m, sending its share price down 2.59%.
Across the Tasman Sea, New Zealand’s S&P/NZX 50 was off 0.1% to 7,789.71.
The Reserve Bank of New Zealand released its latest interest rate decision during the day, standing pat on an official cash rate of 1.75%, although the bank’s governor Graeme Wheeler was said to have taken a more dovish stance than expected.
Wheeler also said he wanted to see a weaker New Zealand dollar, reminding markets that the RBNZ has the capacity to intervene by selling off its reserves - comments said to be “unusually explicit for a central banker on the subject of the currency” in a note from UOB.
Both of the down under dollars were mixed, with the Aussie last off 0.07% at AUD 1.2689 and the Kiwi retreating 0.94% to NZD 1.3759 against the greenback.