Asia report: Markets eke out gains as Fed reaction continues

Markets in Asia posted underwhelming gains on Friday, after a choppy session in which investors were still trying to make sense of a more dovish Fed in the US, along with a fresh slew of data.

In Japan, the Nikkei 225 was up 0.09% at 21,627.34, as the yen strengthened 0.35% against the dollar to last trade at JPY 110.43.

The broader Topix index was ahead 0.17% in Tokyo, at 1,617.11.

Looking at the heavyweights of the Japanese benchmark, automation specialist Fanuc was up 1.4% and technology conglomerate SoftBank saw its shares improve 2.73%.

Fresh official data out from Tokyo during the session showed a slowdown in core consumer inflation in February, with the country’s core consumer price index rising 0.7% year-on-year - just shy of market expectations for a 0.8% reading.

Core CPI in Japan includes oil prices, but excludes fresh food prices.

The slowdown from the 0.8% figure for January was put down to a 1.3% fall in petrol prices.

On the mainland, the Shanghai Composite was up 0.09% at 3,104.15, and the smaller, technology-heavy Shenzhen Composite advanced 0.2% to 1,700.94.

South Korea’s Kospi was 0.09% higher at 2,186.95, while the Hang Seng Index in Hong Kong gained 0.14% to close at 29,113.36.

The blue chip technology stocks were on the front foot in Seoul, with Samsung Electronics ahead 1.53% and SK Hynix rising 0.26%.

Both firms were once again lifted by US chipmaker Micron, which was well into the green on Wall Street overnight after the company said it believed the memory chip sector would stage a recovery later in 2019.

For most bourses in Asia, the session on Friday was particularly choppy, which analysts put down to the ongoing reaction to this week’s Federal Reserve meeting.

On Wednesday, the Fed stood pat on its current interest rate targets, and confirmed it was not looking to raise rates again this year - a significant backpedal from its rhetoric just three months ago.

It also said it was looking to end its balance sheet runoff by the end of September.

“It certainly feels like markets will need a few more days and sessions to interpret the recent change in Fed positioning and to absorb the further developments with regard to trade and geo-political factors,” noted analysts at Rakuten Securities Australia.

Oil prices were lower as the region headed into the weekend, with Brent crude last down 1.3% at $66.99 per barrel, and West Texas Intermediate falling 1.01% to $59.38.

In Australia, the S&P/ASX 200 improved 0.45% to end the day at 6,195.20, as most subindices were in positive territory.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was 0.9% higher to close at a record 9,550.99, led higher by dairy producer Synlait, which was up 5.1%.

Both of the down under dollars were weaker on the greenback, with the Aussie last off 0.24% at AUD 1.4095, and the Kiwi retreating 0.1% to NZD 1.4554.