Asia trades lower, as oil prices drop; Westpac shares down 3.7%
Asian stocks fell modestly Thursday, taking cues from declines in U.S. stocks after a string of top-flight retail companies released disappointing earnings.
The U.S. markets falls came despite gains in oil prices on better-than-expected inventories data. Shares of Disney had their worst day since Jan 15, while Macy’s closed down almost 15.2 percent.
In Australia, the benchmark ASX 200 was down 0.29 percent, led by a 0.97 percent decline in the financials sub-index, which makes up nearly 50 percent of the broader benchmark.
Some of Australia’s major banks came under pressure Thursday morning, with shares ANZ down 0.25 percent and Westpac tumbling 3.67 percent. The Commonwealth Bank of Australia and the National Australia Bank traded up 0.27 and 0.52 percent, respectively.
The Australian Financial Review (AFR) reported that the country’s financial regulator, the Australian Securities and Investments Commission (ASIC), was preparing to lodge a longer statement of claim against Westpac on Friday.
The regulator had previously accused Westpac of market manipulation related to the setting of the bank bill swap reference rate between April 2010 and June 2012, the AFR reported. Westpac has reportedly denied the allegations, and accused ASIC of failing to understand interest rate risk management practices.
Japan’s Nikkei 225 was down 0.48 percent, while across the Korean Strait, the Kospi dropped 0.14 percent. In Hong Kong, the Hang Seng index was down 0.65 percent. Chinese mainland markets were also lower, with the Shanghai composite selling off 0.99 percent and theShenzhen composite down 1.57 percent.
Shares of Toyota pared some of their over 4 percent losses in early morning to trade down 2.88 percent, after the automaker reported its full-year 2016 earnings on Wednesday at market close. While net income for the financial year that ended March 31 was up 6.4 percent on-year, Toyota said it expected a 35.1 percent decline in net income for the full-year 2017.
Other Japanese automakers were also under pressure on Thursday, with shares of Honda down 1.74 percent, Mazda off 0.66 percent and Nissandown 1.5 percent. Shares of Mitsubishi Motors were suspended from trade on Thursday.
Nissan Motor and Mitsubishi Motors confirmed early Thursday that they were in talks over a possible capital tie-up, with reports suggesting that Nissan will take a one-third stake in the latter. Mitsubishi Motors has come under pressure after admitting to cheating on mileage tests.
Meanwhile, troubled air bag-maker Takata saw its shares climb up 12.07 percent, after reports that the company expected to be profitable for the financial year that started in April 2016. The company reported a net loss of 13.1 billion yen ($120 million) for the year ended March 31 on Wednesday, according to Reuters.
Down Under, shares of department store chain Myer were up 6.44 percent, after the company announced sales figures for the 13 weeks through April 23. The company’s sales for the period were up 2.1 percent to 675.5 million Australian dollars ($495.41 million) and year-to-date total sales increased 1.9 percent to A$2.47 billion.
In Singapore, shares of telecommunication giant Singtel were down 0.26 percent after the company reported earnings for the financial year ended March 31, 2016. Full year net profit was up 2.4 percent to 3.87 billion Singapore dollars ($2.83 billion), while free cash flow fell by 23.4 percent to S$2.72 billion due to increased investments.
The dollar lost ground in the currency market overnight, with the dollar index, which measures the dollar against a basket of currencies, slipping to the 93 handle. As of 10:13 a.m. HK/SIN, the index was at 93.832.
“The lack of key data releases, weaker risk appetite and the lure of profit taking after six consecutive days of gains were the most apparent drivers for a softer dollar overnight,” said Rodrigo Catril, a currency strategist at the National Australia Bank.
Fresh strength in the Japanese yen saw the dollar/yen pair slip from the 109 handle on Wednesday; Thursday morning Asia time, dollar/yen traded at 108.47, putting pressure on some Japanese export stocks. Shares of Mitsubishi Electric were down 1.01 percent, Canon was down 0.23 percent, while Sony gained 2.2 percent.
A stronger yen is usually a negative for exporters as it reduces their overseas profits when converted into local currency.
“A short-squeeze in the early week abated with no more official talk of intervention yesterday,” said Wei Liang Chang from Mizuho Bank. “Markets are also doubting if Japan would intervene in advance of the G7 summit, especially with dollar/yen above 105.”
The Australian dollar remained relatively weak, trading at $0.7339, compared to the $0.75 level it touched in the previous week. The Aussie, along with other commodity currencies, received a boost overnight due to higher oil prices.
The New Zealand dollar traded at $0.6820 Thursday morning.
In China, the yuan traded against the dollar at 6.5027, after closing at 6.4910 in the previous session. The People’s Bank of China set the yuan mid-point at 6.4959, compared to Wednesday’s fix at 6.5209; the central bank allows the yuan spot rate rise or fall a maximum of 2percent against the dollar relative to the official fixing rate.
Oil prices jumped overnight, with Reuters reporting that data from the U.S. Energy Information Administration showed crude inventories fell 3.4 million barrels last week, against market expectations for an increase in inventory.
During Asian hours on Thursday, however, oil prices clawed back on gains. Global benchmark Brent futures were down 0.55 percent at $47.34 a barrel, after settling up 4.6 percent overnight. U.S. crude were down 0.45 percent to $46.02, after finishing up 3.5 percent on Wednesday.
Stateside, major indexes closed lower, with the Dow Jones industrial average down 1.21 percent, the S&P 500 off by 0.96 percent and theNasdaq composite losing 1.02 percent.
Source: CNBC
