Asia report: Markets finish mixed as investors digest Fed cut

Markets in Asia finished mixed on Thursday, amid fresh data from China, signals from Japan’s central bank, and as investors digested the Federal Reserve interest rate cut in the US overnight, which was expected.

In Japan, the Nikkei 225 was up 0.37% at 22,927.04, as the yen strengthened 0.63% against the dollar to last trade at JPY 108.16.

Of the major components on the benchmark index, automation specialist Fanuc was up 0.72%, fashion firm Fast Retailing added 1.3%, and technology conglomerate SoftBank Group was 3.71% higher.

The broader Topix index closed just above the waterline in Tokyo, rising 0.07% to settle at 1,667.01.

In fresh news from the Bank of Japan, the central bank announced that it would be maintaining its current monetary policy, although it did hint that it was prepared to cut rates going forward if economic conditions necessitated it.

On the mainland, the Shanghai Composite was off 0.35% at 2,929.06, and the smaller, technology-heavy Shenzhen Composite was 0.76% lower at 1,616.19.

Investors in China spent much of the session looking at the freshly-released economic data, with the official manufacturing purchasing managers’ index standing at 49.3 in October, marking the sixth month of contraction in factory activity for the People’s Republic.

It was also lower than the 49.3 reported for September.

South Korea’s Kospi was up 0.15% at 2,083.48, while the Hang Seng Index in Hong Kong was 0.9% firmer at 26,906.72.

The blue-chip technology stocks were mixed in Seoul, with SK Hynix up 0.61%, and Samsung Electronics flat.

Samsung reported a 56% fall in earnings for the three months ended 30 September during the session, which was still better than the guidance the firm released earlier in October.

Much of the region’s attention was on the United States early in the session, after the Federal Open Market Committee sated investor expectations by cutting its interest rate target by 25 basis points overnight.

At the same time, the central bank removed the phrase that it would “act as appropriate” to sustain the current economic expansion from its post-meeting statement.

“The move by the Fed should take some of the pressure off Mr Powell in relation to President Trump’s outbursts on Twitter,” said CMC Markets analyst David Madden.

“The US president has been demanding the Fed lower interest rates in a bid to drive down the value of the US dollar - to make US exports more competitive.

“It is possible the move by the Fed last night might pave the way for other central banks around the globe to follow suit, so Mr Powell might not be out of the woods yet as far as far as Trump is concerned.”

Oil prices were lower as the region went to bed, with Brent crude last down 0.41% at $60.36 per barrel, and West Texas Intermediate falling 1.2% to $54.41.

In Australia, the S&P/ASX 200 was down 0.39% at 6,663.40, with the hefty financials subindex falling 1.11%.

That was off the back of a 3.26% fall in shares of Australia and New Zealand Banking Group, after the firm announced a 7% fall in statutory profit after tax for the year ended 30 September.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 slipped 0.02% 5o close at 10,787.82, led lower by Kiwi Property Group, which lost 4.8% as trading in its stock resumed after a large capital raising.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.04% at AUD 1.4480, and the Kiwi advancing 0.57% to NZD 1.5565.