Asia report: Markets higher amid strong earnings and Trump tax excitement

Markets in Asia were higher on Wednesday, taking their cue from Wall Street overnight as trader attention turned towards the looming tax reforms promised by US President Donald Trump, alongside a slew of strong earnings in the region.

In Japan, the Nikkei 225 was up 1.1% at 19,289.43, as the yen weakened against the greenback - it was last 0.23% behind at JPY 111.34 per $1.

On the corporate front, Japan Post Holdings added 1.16% after reporting a $3.6bn write-down on its Australasian logistics network Toll Holdings.

The group also published its first estimated loss in almost ten years, saying it was looking at losses of JPY 40bn.

Ailing technology firm Toshiba told media it was breaking off relations with its auditor, PricewaterhouseCoopers Aarata.

It came after PwC Aarata decided not to endorse the company’s third quarter earnings earlier in the month.

Toshiba’s shares were up 2.27%, also influenced by reports in New York that the US government could support its failed US nuclear acquisition Westinghouse.

On the mainland, the Shanghai Composite added 0.2% to 3,140.85, while the Shenzhen Composite was up 0.37% to 1,889.79.

South Korea’s Kospi was ahead 0.5% at 2,207.84, while the Hang Seng Index in Hong Kong also rose 0.5% to 24,578.43.

Gambling plays were higher in Hong Kong, after Wynn Macau’s parent company Wynn Resorts posted a 26% rise in first quarter net profits year-on-year, beating forecasts.

Shares in Wynn Macau were up 4.63%, with Melco International Development adding 6.3% and SJM Holdings 6.3% firmer.

Asian shares took their early cues from Wall Street, where markets soared in the Tuesday session overnight and the Nasdaq index topped 6,000 points for the first time ever.

Strong earnings were also the theme of the day in New York, with machinery giant Caterpillar and burger peddler McDonald’s posting solid numbers.

Investors were also said to be looking forward to Trump’s impending tax cuts, which the President had long signalled would be good for business.

“[Wednesday’s] moves appear to more related to expectations for Trump's impending 'broad principals' tax plan,” noted National Australia Bank economist Tapas Strickland, adding that it was widely believed the corporate federal tax rate would be cut to 15% from 35%.

“The key for markets will be how will such a tax cut be funded and what is the likelihood of the tax cut being passed by Congress.”

Oil prices were lower, with Brent crude last down 0.75% at $51.71 per barrel and West Texas Intermediate losing 0.67% to $49.23.

Australia’s S&P/ASX 200 added 0.69% to 5,912.04, with BHP Billiton shares ticking up 0.58% in Sydney trading.

That came after the major miner lowered its production targets for coking coal, copper and iron ore, blaming the Escondida strikes in Chile and poor weather conditions in Australia.

On the economic front, consumer prices in Australia rose 2.1% in the first quarter year-on-year, though the country’s core inflation was still below the 2%-3% target set by the Reserve Bank of Australia.

In New Zealand, the S&P/NZX 50 was ahead 1.6% at 7,335.14, led higher by dairy products and baby food exporter A2 Milk, which leapt 7.8%.

The China-focussed specialist food producer announced forecast revenue of NZD 525m for the year to 30 June, well ahead of the NZD 325.8m it reported in the year to 30 June 2016.

Both of the down under dollars were weaker on the greenback, with the Aussie last retreating 0.66% to AUD 1.3360 and the Kiwi weakening 0.79% to NZD 1.4501 per $1.