Pedestrians walk past a share prices board in Tokyo. Japanese shares ended up 0.46% at 20,614.06 points yesterday.
AFP/Tokyo
Asian markets were mixed yesterday as traders assessed the prospects of an early US interest rate rise and China’s moves to stem a recent market rout.
The dollar advanced to a four-month high after a US Federal Reserve official expressed support Tuesday for an interest rate rise as early as September.
Tokyo put on 0.46%, or 93.70 points, to close at 20,614.06, while Seoul ended flat, gaining 1.77 points to 2,029.76.
Sydney lost 0.42%, or 23.9 points, to close at 5,674.0, despite big gains by miners on the back of an iron ore price rise.
Hong Kong was up 0.44% or 108.04 points to 24,514.16 by close of trading, while Shanghai closed down 1.65%, or 61.97 points, at 3,694.57.
In other markets, Singapore rose 0.01%, or 0.35 points, to 3,191.39; oil rig maker Keppel Corp gained 3.25% to Sg$7.62 while Oversea-Chinese Banking Corp fell 0.49% to Sg$10.20.
Bangkok rose 0.29%, or 4.20 points, to 1,436.36; Bumrungrad Hospital added 2.27% to 203baht, while Airports of Thailand gained 1.04% to 292baht.
Kuala Lumpur gained 0.11%, or 1.83 points, to end at 1,725.56; Maybank added 0.22% to end at 9.19 ringgit, Telekom Malaysia climbed 0.61% to 6.63 while Public Bank lost 0.10% to 19.14 ringgit.
Jakarta ended up 1.45% or 69.45 points at 4,850.53; lender Bank Negara Indonesia gained 6.36% to 5,100 rupiah, while textile company Sri Rejeki Isman fell 11.33% to 407 rupiah.
Wellington was flat, inching ahead 0.08% or 4.76 points to 5,938.51; Contact Energy was up 0.80% at NZ$5.06 while Genesis Energy was down 1.14% at NZ$1.73.
Taipei rose 0.37%, or 31.41 points, to 8,542.27; Taiwan Semiconductor Manufacturing Co shed 1.83% to Tw$134.0, while Fubon Financial Holding closed 1.22% higher at Tw$58.0.
Manila closed 0.85% or 64.26 points higher at 7,662.55; Universal Robina closed 2.56% higher at 200 pesos, Pacific Online Systems was unchanged at 20.90 pesos, while Metrobank was down 0.45% at 88.10 pesos.
China’s benchmark index saw investors take profits after strong gains the previous day sparked by new restrictions on short-selling. The Shanghai and Shenzhen exchanges said Monday investors who borrow shares must wait until the next day to repay the loans, instead of settling the same day as previously.
That measure followed earlier interventions, including banning major shareholders from selling and funding a state-backed firm to buy stocks.
“The government’s unprecedented, rushed market intervention may have supported prices initially but at the expense of its long-term credibility,” Alex Wolf, an economist for emerging markets at Standard Life Investments, told Bloomberg News.
Traders were also taking note of a International Monetary Fund declaration Tuesday that “significant work” needs to be done in reviewing the inclusion of China’s currency in its basket of “special drawing rights” reserve currency.
The Chinese government is seeking to expand use of the yuan by having it included in the SDR, an international reserve asset that currently is comprised by four currencies: the dollar, euro, pound and yen. Tokyo ticked up after a brief slide in opening trade, rising on positive earnings reports and a weaker yen, but analysts advised caution.
Among Japanese firms that have already reported in the latest earnings season, 61% exceeded profit expectations, an improvement from the 48% that beat forecasts in the previous quarter, according to data compiled by Bloomberg.
“The overseas environment will continue to be a drag on the market,” Hiroichi Nishi, a manager at SMBC Nikko Securities in Tokyo, told Bloomberg News.
“Lockhart’s comments made the market wary of rate hikes once again. Caution toward the Chinese economy continues to weigh on the market as well.”
Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, said Tuesday he supports raising rates in September barring an unexpected stumble in the US economy. Currency traders are keeping a close eye on US economic data as they try to gauge the timeline for a rate increase—a plus for the dollar—which is widely expected in September or December.
In Tokyo forex trade the dollar was at ¥124.40 at the close, up from ¥123.93 early Tuesday. The greenback traded at ¥124.36 in New York late Tuesday.
The euro was at $1.0856 and ¥135.02 compared with $1.0882 and ¥124.40 in US trade.
The dollar’s strength appeared to hit already declining demand for gold, which is less sought after in times of higher interest rates. It fetched $1,085.72 an ounce compared with $1,092.65 on Tuesday.
US stocks ended lower Tuesday following a mixed batch of earnings reports and a fall by Apple of 3.2%, leaving it down more than 12% since its July 21 earnings release. The Dow Jones Industrial Average dropped 0.27%. The broad-based S&P 500 fell 0.22%, while the tech-rich Nasdaq Composite Index slid 0.19%.
Oil prices rose on expectations of upbeat US stockpiles and jobs data due at the end of the week.
US benchmark West Texas Intermediate for September delivery gained 18 cents to $45.92 while Brent crude for September was up 17 cents to $50.17.
