Asia report: Rough day for markets as Australian banks face inquiry
Markets largely dropped across Asia on Tuesday as Australian banks were met with the promise of fresh inquiries and consumer confidence dived in New Zealand.
Bucking the trend was Japan’s Nikkei 225 was up 0.10% at 24,270.62 at the close of trading, having hit a new 27-year high in early trading on Tuesday.
Car manufacturers Honda and Toyota were buoyant after the US and Canada agreed to a revised Nafta deal, which will allow cars manufactured by the two companies in Canada to be exported to the US without facing tariffs.
Nintendo also put in a strong performance after Japanese gaming retailer Tsutayathe reported that prepaid cards for online multiplayer services of the company’s Nintendo Switch gaming console are “selling extremely well” after the service’s launch last month.
South Korea’s Kospi was down 1.25% at 2,309.57 as electronics giant Samsung continued to fall while, following its holiday weekend, Hong Kong’s Hang Seng Index dropped 2.38% to 27,126.38.
With markets on the mainland closed for the remainder of the week due to national celebrations, the drop on the Hang Seng was driven by big drops from HSBC and China Construction Bank, which each fell by more than 2%.
Brent Crude was down 0.59% at $84.48 while WTI increased by 0.05% to $75.34.
Australia’s S&P/ASX 200 dropped by 0.75% to 6,126.22 as the country’s banks face further scrutiny from a newly announced inquiry into foreign transaction fees by the Australian competition and consumer commission.
Aussie residents shell out $2bn a year in foreign transaction fees, according to Australia’s treasurer, Josh Frydenberg.
Westpac, ANZ and the Commonwealth Bank of Australia all dropped following the news.
New Zealand’s S&P/NZX 50 remained fairly constant, dropping just 0.01% to 9,326.59 after a quarterly survey of business opinion showed the worst economic confidence since March 2009, with more firms experiencing weaker demand and anticipating shrinking earnings.
The news saw courier company Freightways, which is regarded as something of a bellwether for the nation’s economy, fall alongside Port of Tauranga, New Zealand’s largest export port.
New Zealand’s dollar weakened against the US dollar on Tuesday, dropping 0.57% to NZD1.5196, and the Australian dollar followed suit, falling 0.71% to AUD 1.3943.