Asia report: Markets mixed as China struggles amid rate cut optimism

Asian markets were mixed on Thursday as Chinese indices struggled for gains as other markets gained on investor optimism that the US Federal Reserve will cut interest rates.

Investors began to anticipate a US rate cut after Fed Chair Jerome Powell said the US central bank is keeping its eye on developments in the domestic economy, and was prepared to do what was necessary to "sustain the expansion".

Japan's Nikkei 225 remained flat, edging just 0.01% lower to 20,774.04 as e-commerce outfit Rakuten climbed 4.66% higher but Nissan dropped 1.70% as a proposed merger between its strategic partner Nissan and Fiat Chrysler fell through.

The Japanese yen was up 0.26% against the dollar at JPY108.18.

In China, the Shanghai Composite was 1.17% lower at 2,827.80 and the tech-heavy Shenzhen Composite fell 2.08% and was at 1,463.70 after a private survey showed that Chinese services activity grew at the slowest pace in three months in May, as it felt the effects of a marked cooling in export sales.

Hong Kong's Hang Seng index was 0.26% higher at 26,965.28 as Geely Automobile Holdings gained 2.23% to come in as the top riser, while South Korea's Kospi was closed for a holiday.

Brent Crude was 0.72% higher at $61.07 while WTI was 0.39% higher at $51.88.

In Australia, the S&P/ASX 200 was 0.38% higher at 6,383.00, rising for a third consecutive session as investors were optimistic of Australian interest rate cuts, with Wisetech Global up 6.3%, Charter Hall gaining 4.6% and Appen 4.4% higher.

New Zealand's S&P/NZX 50 finished the day up 0.31% at 9,987.00 as Synlait and A2 Milk continued their recoveries following drops on Tuesday on the back of the news that Beijing is looking to stimulate China's domestic baby formula market.

Other prominent risers included Fisher & Paykel Healthcare, which rose 2.4%, Tourism Holdings, which climbed by 1.9%, and Gentrack Group which rose by 1.2%.

Finally, the Australian dollar climbed by 0.17% against the US dollar to AU$1.43, while the New Zealand dollar was up 0.17% against the greenback at $1.51.