Asia report: Markets in a mixed state as RBNZ signals surprise rate cut

Markets in Asia finished Wednesday in a mixed state, as investors continued to anguish over the state of the global economy, and New Zealand’s central bank surprised markets by unexpectedly signalling an interest rate cut.

In Japan, the Nikkei 225 was down 0.12% to 21,378.73, as the yen strengthened 0.34% against the dollar to last trade at JPY 110.26.

The broader Topix index was 0.52% lower by the end of the day in Tokyo, settling at 1,609.49.

Carmaker Nissan was among the big losers on the benchmark index, falling 3.5%.

On the mainland, the Shanghai Composite was ahead 0.85% at 3,022.72, and the smaller, technology-heavy Shenzhen Composite was 0.9% higher at 1,654.69.

South Korea’s Kospi was 0.15% lower at 2,145.62, while the Hang Seng Index in Hong Kong added 0.56% at 28,728.25.

Technology giant Samsung Electronics staged a recovery after falling on Tuesday, rising 0.22% a day after it warned that its first-quarter earnings would probably come in below forecasts.

Sentiment continued to waver as investors looked for direction amid concerns about the health of the world’s economy.

Overnight, the US Treasury’s 10-year bond yield stabilised somewhat, although analysts said it was still in a volatile state.

“The global growth and data concerns that drove the downside moves over the last few days are still with us, and investors will be looking for fresh reasons for the market to rally further over the next few sessions,” noted Rakuten Securities Australia.

Oil prices were lower as the region went to bed, with Brent crude last down 0.25% to $67.80 per barrel, and West Texas Intermediate losing 0.76% to $59.49.

In Australia, the S&P/ASX 200 eked out gains of 0.09% to close at 6,136.00.

Rare earths miner Lynas was up 1.9%, a day after its shares surged following a takeover offer from retail conglomerate Wesfarmers.

Wesfarmers shares were 0.71% higher.

Lynas has faced trouble in recent months, as it struggled to convince authorities in Malaysia to issue an environmental licence for its chemicals facility.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was up 1.3%, hitting another fresh record high of 9,698.89.

The big news of the day in the island nation was an announcement from the Reserve Bank of New Zealand, in which it indicated its next interest rate move was more likely to be a cut.

As recently as last month, projections showed the rate as holding steady until starting to rise in the early parts of 2021.

New Zealand’s official cash rate currently sits at a record low 1.75%, having been slashed from its last peak of 3.5% in a series of decisions in 2015 and 2016.

Both of the down under dollars were weaker on the greenback, with the Aussie last off 0.56% at AUD 1.4093, and the Kiwi retreating 1.45% to NZD 1.4688 following the central bank announcement in Wellington.