Asia report: Markets mixed as China data surprises

Markets in Asia ended mixed on Tuesday, as markets slipped away from earlier gains, which came after a dovish speech from Federal Reserve Governor Lael Brainard, as well as better-than-expected data from China.

Japan’s benchmark Nikkei 225 added 0.34% to finish at 16,729.06, as the yen retreated slightly from its relative strength on the greenback.

It was last 0.09% weaker at JPY 101.94 per $1.

Shares in Softbank fell 1.55% in Tokyo on Tuesday after Deutsche Bank downgraded its stock to ‘hold’.

“Over the next 12 months, we think Softbank is likely to trade largely in line with Alibaba, Sprint and the yen, and much of the upside appears realised in the first two,” analysts at Deutsche said in a note on Tuesday.

On the mainland, the Shanghai Composite was almost flat, closing up 0.06% to 3,023.79, while the Shenzhen Composite added 0.62% to 1,989.33.

China released better-than-expected data for August during the session, as fixed asset investment remained steady at 8.1% year-on-year.

Industrial output during the month rose 6.3% and retail sales were up 10.6%.

“Chinese August activity data came in slightly ahead of forecasts, providing confirmation to the better tone of recent releases,” noted CIBC Capital Markets strategist Patrick Bennett.

“Still, the results were near enough to expectations that market impact was and should remain muted.”

In South Korea, the Kospi was up 0.4% at 1,999.36, while the Hang Seng Index fell 0.32% to 23,215.76.

Korean technology giant Samsung Electronics managed a 4.23% rebound on Tuesday, after losing around 7% on Monday in the wake of a global recall of its Galaxy Note 7 smartphone over battery explosion fears.

Tuesday’s gains stemmed from reports that the group’s figurehead leader, Jay Y. Lee, will take a board seat.

It also announced it will sell its printer business to HP in a deal worth more than $1bn.

Markets were given a boost in the early hours after Lael Brainard said she was still concerned about global economic difficulties, and their impact on the US economy, warning against raising interest rates too soon.

“I think there is a bit of a sigh of relief because a dovish Fed official came out and was dovish,” said CBIZ Retirement Plan Services director of research Anna Rathbun.

“There is general nervousness within the market, despite what's going on today, about the effectiveness of central bank policy.”

The Federal Reserve is now in blackout until its two-day meeting of the Federal Open Market Committee on 20-21 September.

Oil prices fell during Asian trading, with Brent crude last down 1.94% at $47.40 per barrel and West Texas Intermediate falling 2.25% to $45.27.

Australia’s S&P/ASX 200 finished down 0.23% at 5,207.8, with losses stemming from the energy and financials subindexes, which both lost 0.69%.

Fortescue Metals managed to sustain a rise of 0.85%, having earlier spiked more than 4% above the line, after it revealed it will pay off a large chunk of its 2019 loan.

National Australia Bank released its August business confidence survey during the session, with suggestions that conditions for business slowed for the second month in a row.

Confidence did pick up, however, after the Reserve Bank of Australia cut its base rate in August.

In New Zealand, the S&P/NZX 50 continued its slump, losing 0.4% to settle at 7,249.24.

It was dragged down by energy firm Mercury Energy, which lost 7.4% as it went ex-dividend, with airport operator AIAL, retirement village builder Ryman Healthcare and utility network Vector all joining the top losers.

The down under dollars were both weaker against the greenback, with the Aussie last off 0.54% at AUD 1.3289 and the Kiwi losing 0.38% to NZD 1.3650 per $1.