Asia report: Markets fall with oil prices, Chinese tech plays tumble

Equities were lower across the Asia-Pacific region on Thursday, with traders taking their cues from a weak showing on Wall Street overnight, as Chinese tech names tumbled.

In Japan, the Nikkei 225 was down 0.3% at 29,598.66, as the yen weakened 0.1% against the dollar to last trade at JPY 114.19.

Robotics specialist Fanuc was up 1.09%, while among the benchmark’s other major components, Uniqlo owner Fast Retailing was down 1.23% and technology giant SoftBank Group slid 2.05%.

The broader Topix index was off 0.14% by the end of trading in Tokyo, closing at 2,035.52.

“The Nikkei 225 has pulled up sharply from its lows on reports that Japan’s latest fiscal stimulus package will be in a huge JPY 55.7trn, or around $484bn,” said CMC Markets chief market analyst Michael Hewson.

“This would be on top of the over 80trn yen already spent since the beginning of 2020.”

On the mainland, the Shanghai Composite was 0.47% weaker at 3,520.71, and the smaller, technology-centric Shenzhen Composite was off 0.65% at 2,460.86.

South Korea’s Kospi was 0.51% lower at 2,947.38, while the Hang Seng Index in Hong Kong lost 1.29% to 25,319.72.

Major technology plays were in the red in the special administrative region, with Alibaba down 5.34%, Baidu falling 7.84%, JD.com 3.58% lower, Meituan off 2.46%, and Tencent 2.4% weaker.

Those moves came a day after internet giant Baidu beat market expectations on third quarter revenue but warned shareholders that advertising revenue was taking a hit as economic growth slowed in China.

The blue-chip technology stocks were on the back foot in Seoul as well, with Samsung Electronics down 0.71% and SK Hynix slipping 0.45%.

Oil prices were lower as the region went to bed, with Brent crude last down 0.09% at $80.21 per barrel, and West Texas Intermediate falling further away from the $80 level, last trading 0.57% weaker at $77.91.

Those moves lower came amid growing concerns around the pace of the ongoing recovery in demand after the troughs of the Covid-19 pandemic, as well as possible oversupply.

Both the International Energy Agency (IEA) and the OPEC coalition of oil-producing countries struck a bearish tone in their monthly market updates earlier in the week.

Stateside, the Biden administration recently called on large oil consuming economies to consider releasing some of their crude reserves to bring prices down, and help the global economic recovery.

“There was some respite for oil prices yesterday, Brent crude sliding to a one month low, on reports that the US and China were looking at a coordinated strategic petroleum reserve release to try and ease some of the pressure on consumers wallets in the lead-up to Christmas,” CMC’s Michael Hewson added.

“A stronger dollar only helped to accelerate this weakness, helping to push copper prices lower as well.”

In Australia, the S&P/ASX 200 was the region’s odd one out, managing gains of 0.13% to 7,379.20, although the energy sector was a drag in Sydney on the back of lower oil prices.

Oil Search was down 1.89%, Santos lost 2.05%, and Woodside Petroleum was 1.7% weaker by the end of trading in the sunburnt country.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 slipped 0.29% to 12,800.33, after a survey from the country’s central bank showed a leap in inflation expectations.

The Reserve Bank of New Zealand’s report showed expectations for price rises over the next two years were now at just under 3%.

In early October, the RBNZ became the first central bank of a G10 currency to hike interest rates in the wake of the Covid-19 pandemic, taking its official cash rate to 0.5% from the previous historic low of 0.25%.

Thus far, it has only been followed by Norway’s Norges Bank in raising rates, with the G10’s eight other central banks so far electing to remain very accommodative.

The down under dollars were both stronger on the greenback, with the Aussie last ahead 0.22% at AUD 1.3731, and the Kiwi advancing 0.71% to NZD 1.4188.