Asian markets largely defy negative Wall Street lead
AFP
AFP, HONG KONG: Major Asian markets mostly shrugged off a negative lead from Wall Street yesterday, with Shanghai performing especially strongly and Japan Post shares soaring again in Tokyo.
The benchmark Shanghai Composite index remained at a 10-week high, extending gains from the previous day when the market rallied more than four per cent on hopes for economic reforms.
The benchmark Nikkei 225 index at the Tokyo Stock Exchange closed 1.00 per cent up, while the Hang Seng Index in Hong Kong was flat in afternoon trading.
Chinas ruling Communist Party issued guidelines for its 2016-2020 development plan on Tuesday, including calling for liberalisation in its capital markets and foreign exchange regime, following a high-level meeting last week.
The government has successfully clamped down on short selling, said Francis Cheung, a senior strategist at brokerage CLSA in Hong Kong, told Bloomberg News. So it is easier for (the) market to go up, especially with anticipation that China will cut rates and do more stimulus.
Wall Street had dropped Wednesday after Federal Reserve chief Janet Yellen kept the possibility of an increase to US interest rates in December on the table.
The Dow Jones Industrial Average fell 0.28 per cent, while the SP 500 lost 0.35 per cent and the Nasdaq edged down 0.05 per cent.
In Tokyo, Japan Post stocks skyrocketed for a second day, as investors scrambled to get their hands on one of Japans best-known companies, with its insurance unit especially in demand.
Toyota said yesterday its half-year net profit jumped 12 per cent as it moves to cut costs and raise productivity, but troubled conglomerate Toshiba was expected to announce a huge operating loss for the six months to September.
Crisis-hit airbag supplier Takata continued its downward spiral in Tokyo, with its share price plummeting 25 per cent to 889 yen ($7.32) at the close to a fresh low for this year.
Theres very little chance for Takata to survive, Amir Anvarzadeh, Singapore-based global head of Japan equity sales at BGC Capital Partners, told Bloomberg.
Its a safety equipment maker killing people and lying about their issue.
Australias SP/ASX 200 Index closed down 0.94 per cent, dragged down by banking and mining stocks, while Seouls benchmark KOSPI index declined 0.16 per cent on concerns of the possible Fed rate hike.
The US dollar continued to strengthen yesterday after Yellens comments that if the economy was performing well and, if conditions warrant, a rate hike in December would be a live possibility.
After days of gains for emerging market currencies, the Malaysian ringgit, Chinese yuan, Thai baht, South Korean won and Indonesian rupiah were all down against the greenback.
The yen changed hands at 121.57 to the dollar, essentially flat from 121.55 in late US trade.
The euro was slightly down against the US currency, fetching 1.0854 from 1.0865, and was at 131.94 yen from 132.06 yen.
In oil markets, US benchmark West Texas Intermediate for delivery in December was trading eight cents higher at $46.40 and Brent crude for December was up 14 cents at $48.72 a barrel.
