Asia report: Markets turn lower as recession fears reemerge
Markets in Asia were broadly in the red on Wednesday, on the back of a turn lower stateside overnight as fears of a global recession heated up once more.
AUD/USD
$0.6531
18:18 26/04/24
GBP/NZD
NZD2.1014
18:18 26/04/24
Hang Seng
17,651.15
10:20 26/04/24
Nikkei 225
37,934.76
09:44 26/04/24
USD/JPY
¥157.6590
18:18 26/04/24
In Japan, the Nikkei 225 was down 0.28% at 20,618.57, as the yen was 0.24% weaker against the dollar to last trade at JPY 106.49.
Of the major components on the benchmark index, automation specialist Fanuc was up 0.74% and fashion firm Fast Retailing was 1.21% firmer, while technology conglomerate SoftBank Group lost 2.86%.
Carmakers were mostly lower in the country, with Mazda Motor down 3.23% and Nissan off 1.52%, while Toyota retraced earlier losses to finish flat.
The broader Topix index was 0.61% weaker, ending the trading day in Tokyo at 1,497.51.
On the mainland, the Shanghai Composite eked out gains of 0.01% to close at 2,880.33, and the smaller, technology-heavy Shenzhen Composite was 0.09% lower at 1,572.62.
The People’s Bank of China set its loose peg on renminbi slightly stronger than the market expected, at CNY 7.0433 against the dollar.
It allows the onshore yuan to trade at 2% above or below its daily reference point.
South Korea’s Kospi was 0.22% firmer at 1,964,65, while the Hang Seng Index in Hong Kong managed gains of 0.15% to close at 26,270.04.
The blue-chip technology stocks were mixed in Seoul, with Samsung Electronics last up 0.11%, while chipmaker SK Hynix lost 0.79%.
Chinese smartphone giant Xiaomi was 4.98% lower in Hong Kong, after it reported a 15% improvement in quarterly revenue overnight.
That was weaker than market expectations, as the company sold less smartphones than forecast and lost market share to its gargantuan rival Huawei.
Oil prices were higher as the region went to bed, with Brent crude last up 1.66% at $61.04 per barrel, and West Texas Intermediate 1.25% firmer at $56.84.
“After a wild ride over the past 10 days, investors are sitting tight,” said London Capital Group head of research Jasper Lawler.
“A lull in news about the ongoing trade dispute, economic stimulus and recession has investors pausing for breath ahead of today’s release of minutes from the July FOMC meeting, Thursday’s PMI data and, most importantly, Federal Reserve [chair] Jerome Powell’s speech at Jackson Hole, Wyoming on Friday.”
Lawler said investors would be keen to see whether he would “stick to his guns” on the mid-cycle adjustment, or whether he would promise the market something more.
He said the next move by the market depended greatly on what the Fed would do with interest rates.
“Given the current climate, the markets are ultra sensitive to the Fed’s outlook meaning that the FOMC minutes could be scrutinised more closely than usual.
“The market is fully pricing in a 25-basis point rate cut for the September meeting and a 50 basis-point rate cut by the end of the year.”
In Australia, the S&P/ASX 200 slid 0.94% to finish its trading session at 6,483.30, with the hefty financials subindex falling 0.62%.
That came as the big four banks were all in the red, with Australia and New Zealand Banking Group down 1.16%, Commonwealth Bank of Australia off 0.14%, National Australia Bank falling 0.69%, and Westpac Banking Corporation 1.82% weaker.
Across the Tasman Sea, New Zealand’s S&P/NZX 50 was 0.9% lower at 10,709.32, led lower by heavyweight A2 Milk, which was off 12%.
That came even as the specialist dairy exporter reported gains of at least 40% in earnings and revenue, amid the busiest part of Wellington’s earnings season.
The down under dollars were a mixed affair, with the Aussie last 0.26% stronger against the greenback at AUD 1.4715, while the Kiwi retreated 0.03% to NZD 1.5591.