Asian Stocks Dip After Choppy Morning Session; Nikkei Underperforms

Date | 20-02-2018 - 02:30 PM Article Type | Stock Markets Region | Asia

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© Reuters. Asian equities were mostly lower on Tuesday after a choppy morning trading session - Asian equities were mostly lower on Tuesday after a choppy morning trading session. The U.S. markets were closed on Monday for a holiday, meaning Asian investors did not have their usual leads as they continued to look for clues on whether Wall Street would continue its recovery.

The Nikkei followed the softer tone in European equities yesterday and closed 1.1% lower as exporters and bank drag on Tokyo stocks. A stronger yen was cited as the catalyst for the selling. The country’s finance minister Taro Aso said today that policymakers needed to do more to achieve their 2% consumer price target. The speech came after the reappointment of Bank of Japan governor Haruhiko Kuroda was reportedly “certain to be approved in parliament”, and that his aggressive quantitative easing policy would remain in place.

The Japan-listed Sony Corp (T:6758) said it planned to form a joint venture to develop an AI-based taxi-hailing system. The announcement came after several Japanese companies, including Softbank Corp. (T:9984), said they were aiming to roll out ride-hailing services amid a global battle to control the technology increasingly central to urban transport.

Meanwhile, the mainland Chinese markets are still closed for the Lunar New Year holiday until Thursday, but reports that the country would restrict companies starting equity investment funds overseas received some attention. Taiwan and Vietnam markets were also closed today.

Hong Kong’s Hang Seng Index came back online today and opened 49 points higher, swung between gains and losses throughout the day and was trading 0.3% lower by 1:30am ET. Chinese banks and developers were the underperformers in the morning trading sessions, while HSBC earnings made headlines as it missed analysts’ estimates and reported a $51.5 billion adjusted revenue and $2.3 billion in adjusted pre-tax profit for the last three months of 2017. The bank’s Hong Kong-listed shares fell 2.03% following the report.

Singapore’s budget was in focus today as finance minister Heng Swee Keat said in a speech that the top marginal Buyer’s Stamp Duty, which would apply to the portion of residential property value in excess of S$1 million, would be boosted to 4% from the current 3%. The highly-expected increase in the Goods and Services Tax would not take effect this year, according to the speech.

Singapore-listed Noble Group Ltd (SI:NOBG) was also in focus after it issued a new profit warning today, flagging a $5billon loss. The company would post its earnings on 28th February.

Elsewhere, Australia’s RBA received some focus as it said there are “pockets” of financial stress in the household sector, and that it was monitoring the situation.

"The historically high levels of mortgage debt in Australia raises questions about the resilience of household balance sheets to a change in circumstances and the ability of the financial system to absorb a widespread increase in household financial stress," said Michele Bullock, the central bank’s assistant governor for the financial system. The RBA also warned that a strengthening Australian dollar could lead to a slower-pick in economic activity and inflation.

Index heavyweight BHP Billiton’s share fell 1% after the company reported a 37% fall in first-half net profit. The ASX fell 0.01% at the close in Sydney.

Author: Heng V. Mony
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