Asia report: Most markets lower as China reopens
Markets in China led Asia mostly lower on Friday, as they returned to trading after a week off for the Lunar New Year holiday.
AUD/USD
$0.6648
21:42 28/05/24
GBP/NZD
NZD2.0776
21:41 28/05/24
Hang Seng
18,821.16
10:20 28/05/24
Nikkei 225
38,855.37
09:45 28/05/24
USD/JPY
¥157.1170
21:41 28/05/24
Japan’s Nikkei 225 was virtually flat, adding 0.02% to 18,918.20, as investors digested the December meeting minutes from the Bank of Japan.
The minutes showed a number of the central bank’s policymakers were of the view that it should not use a rigid range target in trying to get bond yields towards zero percent.
Electronics maker Sony shot up 4.99% after it posted its third quarter earnings, with sales declining 7% and operating profit plummeting 54% as a result of a goodwill impairment in its film production unit.
Its semiconductor division was the shining star, however, with 80,000 smartphone camera sensors per month now being sold, compared to the 73,000 per month reported in July 2015.
Murata Manufacturing was ahead 4.51% after media reports emerged suggesting it was in discussions with Samsung Electronics over the manufacture of batteries for the upcoming Galaxy S8 smartphone.
The yen was weaker against the greenback, last retreating 0.31% to JPY 113.15 per $1.
On the mainland, the Shanghai Composite was down 0.59% at 3,140.65, while the Shenzhen Composite lost 0.39% to 1,909.78.
The People’s Bank of China gave investors an end-of-week surprise with a ten basis point increase in the country’s reverse repurchase agreement short-term interest rates to 2.35%.
“The central bank has abandoned the benchmark deposit rate and borrowing rate as the policy interest rate tool,” noted Natixis senior economist for greater China, Iris Pang.
“This, however, does not mean the start of a tightening cycle.”
China’s unofficial Caixin manufacturing purchasing managers index slowed down in January, at 51, compared to Reuters-polled expectations for a 51.2 reading.
It was also the first day Chinese markets had to react to the abduction of billionaire Xiao Jianhua from the Four Seasons Hotel in Hong Kong, by agents from the mainland.
Reports emerged that Xiao had used his power and influence to help leaders and some of the country’s richest to move cash around under the radar of authorities.
A number of stocks related to Xiao’s Tomorrow Group conglomerate plunged as a result, with sugar company Baotou Huazi reaching Shanghai’s 10% daily downward limit, chemicals producer Baotou Tomorrow Technology off 5.04% and concrete firm Xishui Strong Year Inner Mongolia falling 10% too.
South Korea’s Kospi was 0.1% higher at 2,073.16, with investors giving a cautious thumbs-up to the country’s seasonally-adjusted current account surplus for December, which reached an eight month high.
Samsung Electronics did lose 0.1%, however, as US President Donald Trump expressing his pleasure at the suggestion the firm might build a home appliance manufacturing facility stateside.
Oil prices were higher during Asian trading, with Brent crude last up 0.35% at $56.76 per barrel and West Texas Intermediate adding 0.37% to $53.74.
In Australia, the S&P/ASX 200 finished down 0.42% to 5,621.58, with the energy and materials subindexes dragging the benchmark, falling 1.2% and 2.2% respectively.
The country’s second-biggest airline, Virgin Australia, watched its stock tumble 4.65%, after its low-cost subsidiary Tigerair Australia confirmed it was exiting routes between Australia and Bali immediately after the Indonesian government changed regulations.
Indonesia had withdrawn its approval of Tigerair Australia in January, claiming it didn’t meet its complex charter flight regulations.
Flag carrier Qantas Airways was also down, losing 1.52% on Friday.
New Zealand’s S&P/NZX 50 finished up 0.6% to 7,094.39, led higher by dairy products exporter A2 Milk Company, which gained 3.9% on the back of reports Reckitt Benckiser was to buy competitor Mead Johnson Nutrition for a significant premium.
Both of the down under dollars were weaker, with the Aussie last behind 0.2% at AUD 1.3085 against the greenback and the Kiwi weakening 0.31% at NZD 1.3763.