Asia report: Markets mixed as global recovery stalls

Asia-Pacific markets experienced a day of mixed performance on Thursday, reflecting cautious investor sentiment after overnight declines on Wall Street.

The region's markets were influenced by Japan's latest trade data and the Reserve Bank of India's interest rate decision.

“Despite assurances from US Fed officials that the world's largest economy is not headed for a recession, stocks wilted under pressure amid concerns about the outlook for the US economy,” said TickMill market analyst Patrick Munnelly.

“As a result, Asian stock markets are trading mostly lower on Thursday, following the generally weak handover from Wall Street overnight.

“In addition, increased geopolitical tensions are negatively impacting the markets.”

Munnelly noted that Japanese stocks were lower on Thursday, reversing some of the gains from the prior two sessions.

“The Nikkei 225 is declining below the 35,000 handle as a result of weakness in most industries, with financial and technology companies leading the decline.”

Most markets lower on mixed day for region’s bourses

In Japan, the Nikkei 225 fell by 0.74% to 34,831.15, and the Topix index dropped by 1.11% to 2,461.70.

The losses on Tokyo’s benchmark were driven by significant declines in major stocks, including Sumco Corporation, which plummeted by 15.82%, Shiseido, down 15.52%, and Taiyo Yuden, which saw a 10.31% decrease.

China's markets were relatively stable, with the Shanghai Composite edging up marginally by 0.002% to 2,869.90, while the Shenzhen Component dipped slightly by 0.04% to 8,446.21.

Notable gainers in Shanghai included Hubei Mailyard, which surged 10.15%, along with Lanzhou Greatwall Electrical and Zhejiang Jasan Holding Group, both up by 10.04%.

Hong Kong's Hang Seng Index showed a slight increase of 0.08% to close at 16,891.83.

The index was buoyed by gains in tech-related stocks, with Techtronic Industries rising 3.11%, Sunny Optical Technology up 3.1%, and Hansoh Pharmaceutical Group increasing by 2.81%.

South Korea's Kospi index fell by 0.45% to 2,556.73, weighed down by substantial losses in key stocks such as L&F Co, which declined by 7.91%, SKC dropping 6.03%, and Posco International falling 5.69%.

In Australia, the S&P/ASX 200 decreased by 0.23% to 7,682.00, with real estate and resource stocks leading the losses.

Mirvac Group dropped by 9.01%, Sandfire Resources fell 6.02%, and Westgold Resources slid by 5.67%.

New Zealand's S&P/NZX 50 also saw a decline, down 0.56% to 12,257.28.

The market was dragged lower by energy and healthcare stocks, with Manawa Energy falling 7.94%, Meridian Energy down 3.27%, and Vital Healthcare Property Trust losing 3.12%.

In currency markets, the dollar was last down 0.37% on the yen to trade at JPY 146.14, while it lost 0.57% against the Aussie to AUD 1.5251, and retreated 0.03% from the Kiwi, last changing hands at NZD 1.6677.

Oil prices remained relatively stable, with Brent crude futures last down 0.22% on ICE at $78.16 per barrel, and the NYMEX quote for West Texas Intermediate dipping 0.11% to $75.15.

Japan current account surplus falls short of expectations

In economic news, Japan reported a current account surplus of JPY 1.533trn for June, falling short of the JPY 1.789trn expected by economists surveyed by Reuters.

The lower-than-expected surplus reflected ongoing challenges in the Japanese economy as it navigates global economic uncertainties.

In related news, the Bank of Japan released a summary of opinions from its July monetary policy meeting, revealing internal discussions on potential future rate hikes.

Some BoJ members advocated for raising the policy interest rate gradually, aiming to reach a neutral interest rate of around 1% by the second half of the 2025 financial year.

That would align with the central bank’s goal of achieving price stability.

However, BoJ deputy governor Shinichi Uchida cautioned against immediate changes, citing recent volatility in stock prices and foreign exchange rates as reasons to maintain the current monetary easing policy.

Meanwhile, the Reserve Bank of India (RBI) decided to keep its key interest rate unchanged at 6.5% for the ninth consecutive meeting, in line with economists' expectations.

Reporting by Josh White for Sharecast.com.