Asia report: Markets mixed after OPEC output cut extension

Asian markets ended mixed on Friday, with traders having a muted reaction to the news that oil producers had agreed to extend output cuts by nine months at an OPEC meeting in Vienna.

Japan’s Nikkei 225 was down 0.64% at 19,686.84, as the yen advanced on the greenback.

It was last 0.8% stronger at JPY 110.94 per $1.

Floundering technology firm Toshiba confirmed it had received bids for its valuable memory chip division from Broadcom, Hon Hai Precision Industry, KKR and SK Hynix.

It appeared to suggest some offers were north of JPY 2trn in value, though its shares still closed down 0.35%.

On the mainland, the Shanghai Composite added 0.08% to 3,110.16.

In South Korea, the Kospi finished 0.53% firmer at 2,355.30, while the Hang Seng Index in Hong Kong was 0.03% above the waterline at 25,639.27.

Chinese computer equipment maker Lenovo, listed in Hong Kong, was 3.37% lower even after it confirmed it was back in the black in the year to March.

It did warn shareholders that some short-term risks remained, likely driving the share price lower.

Oil production cuts of 1.8 million barrels per day were first agreed in November 2016, and would now last until March 2018 after the Vienna meeting.

“Oil was practically begging to be knocked off its perch after rallying into the OPEC meeting with wide expectations [for] extended cuts,” noted ThinkMarkets senior market analyst Matt Simpson.

“As the extensions were estimated to be around nine to 12 months, OPEC needed to far exceed this time horizon for oil to sustain its rally.”

Prices were a touch higher during the Asian session, though they turned around in early European trading, with Brent crude last off 0.18% at $51.37 per barrel and West Texas Intermediate down 0.21% to $48.80.

Australia’s S&P/ASX 200 slipped 0.66% to close at 5,751.66, with weakness in the energy and materials subindexes driving the losses.

The two sectors finished down 1.71% and 1.26% respectively.

Across the Tasman Sea, the S&P/NZX 50 was 0.1% higher at 7,441.57, led by medical equipment manufacturer Fisher & Paykel Healthcare, which was firmer by 2.2%.

The company had posted an 18% improvement in full-year profit earlier in the week.

It was a mixed session for the down under dollars, with the Kiwi last 0.46% stronger on the greenback at NZD 1.4174, while the Aussie weakened 0.06% to AUD 1.3422.