Shares in Asia were mixed on Tuesday, with record gains in the US market overnight offset by a dip in oil prices and a firmer yen.
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Asian stocks rose as the yen steadied after breaking through 100 against the dollar and investors weighed the prospects for higher rates this year. The link, which was formally announced on Tuesday, will open the way for global investors to trade a broad array of technology and start up stocks, whereas before they only had access to the less popular state owned enterprises and banks which dominate the Shanghai exchange.
New Zealand’s NZX-50 index rose 44.34 points or 0.61 percent to 7,355.02 after dairy prices rose more than expected at the latest GlobalDairyTrade auction, building products group Fletcher Building forecast a strong uplift in underlying earnings for 2017 and an official report showed employment in the country accelerated at a faster rate in the second quarter of 2016. The benchmark Kospi dropped 4.01 points or 0.20 percent to 2,043.75.
China’s Shanghai Composite index closed down 0.48 point or 0.02 percent at 3,109.55 while Hong Kong’s Hang Seng index was down 116 points or 0.51 percent at 22,794. “The US dollar will continue to struggle until that chance rises meaningfully”, said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.
Analysts told the media on Tuesday they expect further yen strength in the near future, following the market’s disappointment with the Bank of Japan’s stimulus plans.
The slightly weaker currency likely gave Japanese manufacturers some support in morning trade, with Toyota shares advancing 1.67 percent, Honda up 2.30 percent and Canon up 0.35 percent.
“Without the Federal Reserve Board doing the heavy lifting (with a US interest rate hike) and with the Japanese economy seemingly immune to monetary and fiscal stimulus, it will take little more than a few consecutive session probes below 100 yen for traders to be hotly testing the BOJ’s resolve, while knocking on the post-Brexit spot level at 99.02 yen”, said Stephen Innes, a senior trader at OANDA.
Mainland China’s second stock exchange, in the southern city of Shenzhen, was due to follow past year, but the launch was delayed by a market rout.
Elsewhere, the dollar slumped against a basket of currencies, trading at 94.871, compared with levels above 95.00 during Asian hours on Tuesday. The euro edged down to $1.1261 from $1.1276. The U.S. equity benchmark index slipped 0.6 percent on Tuesday. The contract rose 84 cents on Tuesday to $46.58. Santos, Woodside Petroleum, Origin Energy and Oil Search gained 1-2 percent after oil prices settled up almost 2 percent overnight.
China also reported that outbound foreign direct investment is up almost 62% in the first seven months of the year compared with the same period in 2015.
Australian biotechnology firm CSL reported net profit after tax of $1.24 billion for the full year ended June 30, slipping from $1.38 billion booked in the previous year.
However, shares then reversed direction in afternoon trade.
On Wall Street on Monday, S&P 500, Dow and Nasdaq stock indexes all closed at all-time highs, gaining 0.3 to 0.6 per cent.
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