Asia mixed in quiet trading session, with Nikkei up 1.9%
Asia markets were mixed in a quiet session on Tuesday, with a weaker yen buoying Japanese stocks while Chinese stocks gave up some of their Monday gains.
Japan’s Nikkei 225, which reopened after a public holiday Monday, closed up 323.74 points, or 1.94 percent, at 17,048.55. Across the Korean Strait, the Kospi finished up 7.05 points, or 0.35 percent, at 1,996.81. Hong Kong’s Hang Seng index gave up morning gains to trade down 0.11 percent.
Chinese markets, which were up Monday after authorities signaled the loosening of controls over margin lending, retreated slightly, with the Shanghai composite down 0.14 percent while the Shenzhen composite was up 0.41 percent.
Down Under, the ASX 200 index gave up early gains to close flat at 5,166.60, weighed by the financials and materials sub-indexes, down 0.46 and 0.58 percent, respectively.
Mark Matthews, head of research for Asia at Bank Julius Baer, wrote in a morning note that ahead of the Good Friday holiday, markets were very quiet but stable. “There is no real reason for them to sell off, apart from their being high,” said Matthews.
But economists at Deutsche Bank said in their Asia Economics Monthly note that despite the recovery in global risk sentiment, accompanied by stability in the currency market and a rally in asset prices, Asia’s economic outlook remained a cause for concern.
“Asia’s underlying economic data have worsened progressively. Exports, which declined across the board in the region last year, have started 2016 even weaker, both in value and volume terms,” the economists said, adding “industrial production data and PMI survey readings have also been poor. Weak demand from China is a key contributor to this phenomenon, but another important element is chronic weakness in demand from EU.”
On the currency front, the Japanese yen retreated to the 112 handle against the dollar, with the dollar/yen pair trading up 0.18 percent at 112.13 as of 2:10 p.m. HK/SIN time.
Major Japanese exporters received a boost Tuesday, with Toyotaadding 3.57 percent, Nissan up 1.98 percent and Honda adding 1.24 percent. A weaker yen is usually a positive for exporters as it improves their overseas profit numbers when converted to local currency.
The Australian dollar climbed up to the $0.76 level against the greenback, with the pair trading near up 0.54 percent at 0.7617.
Chris Weston, chief market strategist at IG, said in an afternoon note that the low levels of implied volatility in equity markets have benefited the Aussie dollar, with “the rise in iron ore, steel and energy [have] … also been a key tailwind [for the currency].”
Reserve Bank of Australia (RBA) governor Glenn Stevens said earlier Tuesday that the recent rise of the Aussie was risky, Reuters reported. Commodity prices would need to recover strongly and the U.S. Federal Reserve would have to keep interest rates at current levels to justify the higher Aussie dollar, the central banker said, according to Reuters.
In corporate news, Japan’s Jiji News reported Monday that Taiwanese manufacturer Foxconn would likely reduce its capital injection into troubled electronics maker Sharp by around 100 billion yen ($898 million), compared to its initial plan of injecting 489 billion yen, according to Reuters. Shares of Sharp closed down 6.52 percent.
Elsewhere, the Nikkei reported that airbag manufacturer Takataplanned to sell Irvin Automotive Products, an American company that produces automotive interior materials, for tens of billions of yen to fund the recall of its defective air bags. Takata shares ended up 0.38 percent.
Mining stocks were mixed, with major miners in Australia, Rio Tinto andBHP Billiton, finishing down 0.54 and 1.49 percent respectively. But iron ore producer Fortescue closed up 0.36 percent, following an overnight uptick in iron ore prices to $58 a tonne, from $56.30 on Friday.
Chinese metal plays were mostly lower, with shares of Baoshan Steeldown 1.84 percent, Shandong Jinling Mining down 3.69 percent andYunnan Copper lower by 1.65 percent. Metal prices on the London Metal Exchange (LME) were mixed, with three-month copper trading down 0.23 percent while three-month aluminum was up 0.23 percent.
Oil prices advanced overnight, with Reuters reporting that data showed crude inventories at the Cushing, Oklahoma, delivery hub for U.S. futures fell for the first time since January. U.S. crude futures for April delivery added 1.2 percent to $39.91 a barrel, before expiring as the front-month contract.
During Asian hours, U.S. crude futures for May delivery, which becomes the front-month contract, added 0.39 percent to $41.68 a barrel. Global benchmark Brent futures were up 0.39 percent at $41.70, after settling up 0.8 percent.
Energy plays were mixed as of 2:30 p.m. HK/SIN time, with Santosfinished up 0.25 percent, Woodside Petroleum higher by 0.77 percent, Japan’s Inpex closing down 0.92 percent and South Korea’s S-Oil fell 0.33 percent. Mainland Chinese energy plays were mixed, with Sinopecadding 3.27 percent.
Major U.S. indexes advanced overnight, with the Dow Jones industrial average adding 0.12 percent, S&P 500 higher by 0.1 percent andNasdaq composite gaining 0.28 percent.
Source: CNBC
