Asia report: Markets mixed ahead of MSCI China decision, Aussie banks fall

Markets in Asia finished mixed on Tuesday, with many traders keeping their wallets firmly closed ahead of the decision from MSCI on whether to include mainland China stocks.

Japan’s Nikkei 225 was ahead 0.81% at 20,230.41, as the yen held firmly to its grip of the 111-level against the greenback.

It was last just 0.01% weaker at JPY 111.54 to USD.

On the mainland, the Shanghai Composite was down 0.13% at 3,140.30, while the Shenzhen Composite finished up 0.12% at 1,879.06.

South Korea’s Kospi was down 0.07% at 2,369.23, while the Hang Seng Index in Hong Kong booked losses of 0.31% to 25,843.04.

Investors across the region were keeping an eye on the impending decision from MSCI on whether to include A-shares from the country’s domestic markets in its Emerging Markets Index.

It would be the fourth time China had attempted to be included by MSCI, having been ignored on the previous three attempts.

Oil prices were higher during Asian trading, though they slipped as Europe took the trading baton, with Brent crude last down 1.89% at $46.04 per barrel and West Texas Intermediate off 1.97% at $43.57.

In Australia, the S&P/ASX 200 was off 0.83% at 5,757.25, with the weighty financials subindex pushing the wider benchmark lower after Moody’s downgraded the country’s banks to AA3 from AA2, bringing that agency’s rating into line with S&P’s AA- rating.

Shares in the so-called ‘big four’ were all in the red, with Australia and New Zealand Banking Group down 1.34%, National Australia Bank off 1.09% and Commonwealth Bank of Australia losing 0.66% in Sydney trading.

On the policy front, the Reserve Bank of Australia released the minutes of its June meeting, showing the central bank remained concerned about household debt and the lack of wage growth in the country, though it remained upbeat about growth in general.

The RBA had stood pat on interest rates earlier in the month, citing weak growth.

New Zealand’s S&P/NZX 50 finished off 0.07% at 7,586.53, having touched a new record high of 7,613.19 during the session.

Flag carrier Air New Zealand rose 1.9% to reach a new record since it was bailed out by the government in September 2001.

The big banks were in the red in Wellington as well, reflecting their Sydney performance, as Australia and New Zealand Banking Group and Westpac Banking Corporation lost 0.8% and 1% in their New Zealand stocks respectively.

Both of the down under dollars were stronger on the greenback, with the Aussie advancing 0.05% to AUD 1.3153 and the Kiwi marching ahead by 0.21% to NZD 1.3802.