Asia report: Markets mixed as investors watch news on Samsung, Huawei

Markets in Asia finished in a mixed state on Monday, as investors digested the latest economic data out of China, and reacted to developments around tech giants Samsung and Huawei.

In Japan, the Nikkei 225 was down 0.97% at 28,242.21 as the yen strengthened 0.09% against the dollar to last trade at JPY 103.76.

Of the major components on the benchmark index, automation specialist Fanuc was down 2.31%, fashion firm Fast Retailing was down 0.86%, and technology conglomerate SoftBank Group lost 0.18%.

The broader Topix index ended the session 0.6% weaker by the end of trading in Tokyo, at 1,845.49.

On the mainland, the Shanghai Composite managed gains of 0.84% to 3,596.22, and the smaller, technology-heavy Shenzhen Composite was 1.48% firmer at 2,401.78.

Fresh data out of China showed the country’s economy expanding in 2020, as its gross domestic product rose 2.3% in 2020 as it battled the Covid-19 pandemic.

That compared with expectations for expansion of a little over 2%, and retail sales, meanwhile, were 3.9% lower year-on-year.

“We recalculate real GDP growth based on nominal GDP - less prone to political tampering - and a deflator constructed from an array of official price figures,” explained Pantheon Macroeconomics chief Asia economist Freya Beamish, explaining that at this stage, its recalculation suggested growth ticked up to 2.2% quarter-on-quarter in the fourth quarter, from 1.9% in the third.

“But, as we flagged in our preview of these data, we’ll probably revise those figures when the authorities complete their revisions to nominal GDP, showing faster growth in the third quarter, and slower growth in the fourth.

“Our initial analysis suggests that real GDP growth was lower than the headlines imply last year, at just 0.9%, rather than the 2.3% in the official story, down from 4.2% in 2019, rather than the official claim of 6.0%.

“Plumping up the numbers again implies that the authorities are preparing markets for normalisation - we reckon they have their own internal figures that are closer to reality.”

Beamish said it seemed unlikely, however, that support would be removed “in any serious way” until at least the middle of the year.

Privately-held mobile technology company Huawei was in focus, after Reuters said Donald Trump’s administration had revoked licences to several American companies to sell to the firm.

Chipmaking giant Intel was said to be among the companies, with the announcement coming just days out from the inauguration of US president-elect Joe Biden, and the end of the Trump White House.

South Korea’s Kospi fell 2.33% to 3,013.93, while the Hang Seng Index in Hong Kong gained 1.01% to 28,862.77.

Consumer technology behemoth Samsung Electronics was 3.41% in Seoul, after reports that heir to the Samsung chaebol, Jay Lee, had been handed a 2½ year prison sentence.

Reuters said the Seoul High Court had imposed the sentence after finding Lee guilty of bribery, concealment of criminal proceeds and embezzlement.

Among the other components of the conglomerate, Samsung C&T was sown 6.84% and Samsung Heavy Industry was 2.74% weaker.

Korea’s blue-chip technology stocks were mixed in the wake of the Samsung news, with SK Hynix closing 1.96% firmer.

Market attention was set to swing to the inauguration of Joe Biden later in the week, with Markets.com chief market analyst Neil Wilson noting that violence was a concern, although the US authorities would strive to prevent a repeat of the Capitol mob on 6 January.

“Biden himself plans a bonfire of the vanities, with a series of executive orders in his first 10 days designed to wipe away the sinful past of the Trump era,” Wilson said.

“This will also see the president take greater control of vaccinations.”

Oil prices were lower at the end of the Asian day, with Brent crude last down 0.18% at $55 per barrel, and West Texas Intermediate losing 0.08% to $52.32.

In Australia, the S&P/ASX 200 lost 0.78% by end-of-play in Sydney to 6,663.00, as the hefty financials subindex lost 1.07%, dragging Sydney’s benchmark lower.

Among the sunburnt country’s big four banks, Australia and New Zealand Banking Group was down 1.54%, Commonwealth Bank of Australia lost 0.83%, National Australia Bank slid 2.03%, and Westpac Banking Corporation was 0.75% weaker.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 slid 1.43% to 12,838.36, with travel-focussed stocks in the red amid the country’s ongoing border closure.

Airport operator AIAL, which operates the country’s largest international arrivals port in Auckland, lost 3.1% and tourism operator THL was 3.39% weaker.

New Zealand has allowed only citizens and existing permanent residents into the country since the outbreak of the coronavirus pandemic in the first half of 2020, with some exceptions permitted for vital and high-profile employment.

All arrivals are required to complete a 14-day quarantine in a government-managed facility, with temporary arrivals being charged NZD 3,100 for the privilege.

Both of the down under dollars were last trading 0.44% weaker against the greenback, with the Aussie changing hands at AUD 1.3030 and the Kiwi sitting at NZD 1.4064.