Asia report: Markets lower as China arrests Aussie casino staff

Markets in Asia were mostly red by end-of-play on Monday, with Australian shares particularly hurt by reports Chinese authorities were detaining a number of staff from casino operator Crown.

Japan’s Nikkei 225 did manage a green finish, added 0.26% to 16,900.12, with a relatively weak yen giving domestic shares a boost.

It was last very slightly stronger, however, adding 0.08% since markets closed to JPY 104.10 per $1.

The major exporters were mostly higher, with Mitsubishi Electric up 2.39%, Nissan 0.22% higher, and Toyota tacking on 0.62%.

It wasn’t all rosy, however, as Honda lost 0.1% and Sony stock fell 0.38%.

Panasonic finished up 2.05%, surging after it was reported that the electronics conglomerate was preparing to work with US electric car manufacturer Tesla Motors to manufacture solar cells and products stateside.

On the mainland, the Shanghai Composite finished 0.74% lower at 3,041.24, while the Shenzhen Composite lost 0.92% to 2,027.55.

The markets in China were muted ahead of an almighty tsunami of data from the People’s Republic later this week, including third quarter gross domestic product, retail sales, industrial production, fixed asset investment and house prices.

South Korea’s Kospi finished up 0.24% at 2,027.61, while Hong Kong’s Hang Seng Index was down 0.84% to 23,037.54.

Shares in Hong Kong gambling firms were under pressure amid the Crown staff situation, with Melco International, Sands China and Wynn Macau shares all lower.

In Seoul, shares in Samsung Electronics added 0.82%, reversing earlier losses of more than 1% as the company continued to fight the PR firestorm created by the Galaxy Note 7 smartphone.

Last week, the company warned the failed product - which had now gone through two global recalls and was suspended indefinitely amid reports the batteries were susceptible to explosions - would cost more than $5bn.

The Federal Reserve was coming into focus for Asian traders once more, after chair Janet Yellen suggested on Friday that the central bank could be keen to let inflation continue ablaze for some time more.

“Though the Fed chair offered no fresh clues on near term policy decisions, Yellen posed a lot of questions deemed worthy of further research, the one markets jumped on being the suggestion that running a 'high pressure' economy could boost labor market participation and ultimately lift the supply side potential of the US economy,” said National Australia Bank co-head of foreign exchange strategy Ray Attrill.

Oil prices were lower during Asian trading, with Brent crude last down 0.12% at $51.89 per barrel and West Texas Intermediate losing 0.28% at $50.21.

In Australia, the S&P/ASX 200 fell 0.83% to 5,388.70, with most subindexes closing lower and the weighty financials and energy sectors dragging by 0.27% and 0.81% respectively.

Shares in Crown Resorts were down 13.9% in Sydney, after the company reported that 18 of its staff - including vice-president of the international VIP division Jason O’Connor - were being held by Chinese authorities.

Crown confirmed it was working closely with the Department of Foreign Affairs and Trade to reach out to them.

Meanwhile, the Foreign Ministry in Beijing told CNBC that the Australian nationals were under “criminal detention” for “suspected involvements in gambling crimes”.

The ministry’s statement reportedly said the case was under investigation.

Crown rival Star Entertainment shares were also down, falling 3.66% by the close.

It was pointed out in a number of local news reports that it is illegal for more than 10 people to gamble overseas together in China, though whether this has to do with the detention was unclear.

On the energy front, Oil Search lost 0.98% and Santos was down 2.43% given the weak crude environment.

New Zealand shares fell, with the S&P/NZX 50 losing 0.9% to 7,066.37.

SkyCity Entertainment - an Auckland-based rival to Crown Resorts, with five casinos across New Zealand and Australia, was off 4.1% amid the Chinese detentions.

“In the Asia-Pacific region, [the casino operators are] all competing for those large whales who fly in, and possibly this is a general crackdown on this side of the market,” Hamilton Hindin Green director James Smalley was quoted as saying by BusinessDesk.

“These are extremely high net worth individuals so this might put a crimp on some of that high worth activity which is [SkyCity’s] high margin stuff.”

The down under dollars were mixed, with the Kiwi last 0.44% ahead at NZD 1.4046 against the greenback and the Aussie weakening 0.24% to AUD 1.3162 per $1.