Asia report: Markets finish mixed as Tankan survey disappoints

Markets in Asia finished in a mixed state on Wednesday, as fresh economic data out of China beat expectations, but a survey in Japan showed sentiment among businesses there turning more sour.

In Japan, the Nikkei 225 was down 0.75% at 22,121.73, as the yen strengthened 0.37% against the dollar to last trade at JPY 107.53.

Technology conglomerate SoftBank Group rose 1.85%, while among the benchmark’s other major components, automation specialist Fanuc was down 0.91%, and fashion firm Fast Retailing lost 0.31%.

The broader Topix index was off 1.29% by the end of trading in Tokyo, closing at 1,538.61.

Business mood was shown to be worsening in the country in the Bank of Japan’s most recent quarterly Tankan survey, released on Wednesday.

The headline index reading for sentiment among large manufacturers fell to -34 for June from -8 in March, making for the lowest figure in 11 years.

On the mainland, the Shanghai Composite added 1.38%, and the smaller, technology-heavy Shenzhen Composite gained 0.79% to 1,991.11.

The unofficial Caixin/Markit manufacturing purchasing managers’ index came in at 51.2 for June, according to a release on Wednesday.

That was above expectations for a reading of 50.05 according to analysts polled by Reuters, and followed an above-forecast expansionary result from the official PMI on Tuesday.

A figure above 50 points signals expansion, while one below 50 is indicative of contraction.

South Korea’s Kospi slipped 0.08% to 2,106.70, while markets in Hong Kong were closed for a public holiday.

The blue-chip technology stocks were mixed in Seoul, with Samsung Electronics down 0.38%, while chipmaker SK Hynix rose 0.24%.

Focus on the still-growing growth of the Covid-19 pandemic in the United States remained, with Neil Wilson, chief market analyst for Markets.com, noting that even though Dr Anthony Fauci, director of the National Institute of Allergy and Infectious Disease, said it was “out of control”, confidence was returning among Americans.

“The Conference Board’s index jumped by 12.2 points to 98.1, the best one-month rise in nine years.”

Wilson also pointed that Chinese data was “a little better than expected” given the Caixin PMI results, while the Tankan survey disappointed.

“Data points will remain mixed and noisy as we exit the crisis,” he said, adding that “PMIs, which are diffusion indices, are particularly challenged by the speed and magnitude of the economic contraction.

“I would prefer to look at the hard data as it comes out over the third quarter.

“Economically things have rarely been this uncertain - we could be running way hotter than we think, but equally the long-term consequences could be deeper and longer-lasting than the V-shaped recovery camp would have it.”

Oil prices were higher at the end of the Asian day, with Brent crude last up 2.93% at $42.48 per barrel, while West Texas Intermediate added 3.03% to $40.46.

In Australia, the S&P/ASX 200 gained 0.62% to settle at 5,934.40, while across the Tasman Sea, New Zealand’s S&P/NZX 50 fell 0.88% to 11,350.27.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.13% at AUD 1.4467, and the Kiwi advancing 0.16% to NZD 1.5467.