Asia report: Stocks mixed as Bank of Korea hikes policy rate
Markets closed in a mixed state in Asia on Thursday, with South Korean equities in focus after the Bank of Korea hiked interest rates.
In Japan, the Nikkei 225 was up 0.67% at 29,499.28, as the yen strengthened 0.07% on the dollar to last trade at JPY 115.35.
It was a positive day for the benchmark’s major components, with robotics specialist Fanuc up 2.29%, Uniqlo owner Fast Retailing adding 1.62%, and technology giant SoftBank Group 1.32% firmer.
The broader Topix index advanced 0.33% by the end of trading in Tokyo, closing at 2,025.69.
On the mainland, the Shanghai Composite was down 0.24% at 3,584.18, and the smaller, technology-centric Shenzhen Composite was 0.33% weaker at 2,512.22.
South Korea’s Kospi was off 0.47% at 2,980.27, while the Hang Seng Index in Hong Kong advanced 0.22% to 24,740.16.
Seoul’s blue-chip technology stocks were in the red, with Samsung Electronics down 1.47% and SK Hynix losing 1.67%.
The moves on the Korean peninsula came after the Bank of Korea raised its policy rate by 25 basis points to 1%, sating market expectations.
“A hike had been strongly signalled at October’s meeting, so today’s move is no big surprise,” said Craig Botham at Pantheon Macroeconomics.
“Changes to the Bank of Korea’s economic forecasts, meanwhile, push the bank in a more hawkish direction.”
Botham noted that inflation forecasts were revised higher for 2021 and 2022, to 2.3% from 2.1%, and to 2% from 1.5%, respectively.
“As the BoK statement said, this means inflation is set to run considerably above 2% in the near-term, before declining slowly.
“This is chiefly an energy story, though core inflation was also revised higher by 0.3 percentage points for 2022.
“Growth forecasts were unchanged.”
Oil prices were mixed as the region went to bed, with Brent crude last up 0.15% at $82.37 per barrel, while West Texas Intermediate fell 0.12% to $78.30.
In Australia, the S&P/ASX 200 managed gains of 0.11% to 7,407.30, while across the Tasman Sea, New Zealand’s S&P/NZX 50 was 0.22% firmer at 12,794.61.
The down under dollars were both weaker against the greenback, with the Aussie last off 0.13% at AUD 1.3915, and the Kiwi retreating 0.36% to NZD 1.4598.