Asia report: Markets mixed as China looks to crack down on banks

Markets in Asia finished mixed on Friday, with traders growing concerned over reports that banking regulators in China were looking to quiz banks over their offshore asset investments.

In Japan, the Nikkei 225 was up 0.11% at 20,132.67, as the yen strengthened against the greenback, remaining tightly at the 111 level.

It was last ahead 0.1% at JPY 111.22.

On the mainland, the Shanghai Composite was up 0.32% at 3,157.43, while the smaller Shenzhen Composite rose 0.46% to 1,871.34.

Chinese media reports during the session suggested regulators in the country had asked banks to investigate how exposed they are to large firms involved in international acquisitions in recent years.

It came after MSCI confirmed it was including 222 Chinese A-shares in its benchmark emerging markets index earlier in the week.

Wanda Film, a division of the Dalian Wanda conglomerate, recovered slightly on Friday, rising 3.6% after its shares were suspended following a 10% tumble early on Thursday.

South Korea’s Kospi was ahead 0.35% at 2,378.60, while the Hang Seng Index in Hong Kong was down 0.02% at 25,670.05.

Oil prices were up slightly during Asian hours, with Brent crude last 0.42% higher at $45.41 per barrel and West Texas Intermediate up 0.26% at $42.85.

In Australia, the S&P/ASX 200 finished 0.17% higher at 5,715.88, with the gains underpinned by the healthcare and materials subindexes, with the weighty financials sector losing 0.37%.

Banks were under pressure after the state government of South Australia - one of the less populous states - announced a new tax on Australia and New Zealand Banking Group, Commonwealth Bank of Australia, Westpac, and institutional bank Macquarie.

It was the latest in a series of new costs on banks, after the federal government announced a levy on large banks in May.

National Australia Bank lost 0.51% and Westpac Banking Corporation was off 0.03%, while Australia and New Zealand Banking Group was off 0.57%.

In New Zealand, the S&P/NZX 50 lost 0.1% to 7,553.64, led lower by energy generator and retailer Contact Energy, which lost 1.9%.

Both of the down under dollars were stronger on the greenback, with the Aussie gaining 0.32% to AUD 1.3216 and the Kiwi advancing 0.21% to NZD 1.3735.