Asia report: Markets mixed as investors turn attention to Brexit

Markets in Asia finished mixed on Wednesday, as investor attention turned to Europe amid renewed optimism for a Brexit deal overnight.

In Japan, the Nikkei 225 was up 1.2% at 22,472.92, as the yen strengthened 0.08% against the dollar to last trade at JPY 108.77.

Of the major components on the benchmark index, automation specialist Fanuc was up 3.35% and fashion firm Fast Retailing was 3.9% firmer, while technology conglomerate SoftBank Group slipped 0.19%.

The broader Topix index was 0.7% higher by the end of trading in Tokyo, closing at 1,631.51.

On the mainland, the Shanghai Composite was down 0.41% at 2,978.71, and the smaller, technology-heavy Shenzhen Composite lost 0.38% to 1,635.65.

South Korea’s Kospi was 0.71% firmer at 2,082.83, while the Hang Seng Index in Hong Kong managed gains of 0.61% to 26,664.28.

The gains in Hong Kong came after the special administrative region’s leader Carrie Lam was forced to deliver her annual policy speech via video, after she was heckled by pro-democracy lawmakers in the city’s Legislative Council chamber.

Lam focussed on housing and land policy in her address, which were understood to be intended to bring back confidence in the administration amid ongoing anti-government protests that have racked confidence in Hong Kong.

Both of the blue-chip technology stocks were higher in Seoul, with Samsung Electronics up 1.2% and SK Hynix rising 1.48%.

The Bank of Korea sated market expectations by cutting interest rates for the second time in three months during the day, following a previous cut in July.

Sentiment was on the up amid news that the European Union and the United Kingdom were close to reaching a deal.

Sterling reached a four-month high after positive comments from chief European negotiator Michel Barnier, and reports that the two sides were drafting a legal text for a deal.

“If a draft deal can be achieved we would expect another spike north to 1.30 on cable in very short order, and potentially 1.3170 could be targeted,” said Markets.com chief market analyst Neil Wilson.

“It could get very choppy now.”

In Australia, the S&P/ASX 200 rose 1.27% to 6,736.50, with the hefty financials subindex rising 1.51%.

The listing of lender Latitude Financial was cancelled on Wednesday, having been expected to be the country’s largest initial public offering of the year.

Its chief executive officer told the market that the IPO would not go ahead, as investors were apparently not prepared to pay a price that properly reflected the firm’s value.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was up 1.2% at 11,178.64, with fast food master franchisee Restaurant Brands among the leading risers, adding 4.2%.

The firm, which operates the KFC, Pizza Hut, Carl’s Jr and Taco Bell brands in New Zealand and parts of Australia and the South Pacific, reported a small fall in first-half profits but said it was still expecting full-year earnings to rise at least 10%.

Both of the down under dollars were weaker on the greenback, with the Aussie last off 0.34% at AUD 1.4860, and the Kiwi retreating 0.72% to NZD 1.6002.