Asia report: Markets mixed as oil prices fall further

Markets in Asia finished in a mixed state on Tuesday, as investors kept a watchful eye on oil prices, which continued to fall.

In Japan, the Nikkei 225 slipped just below the waterline, closing down 0.06% at 19,771.19, as the yen strengthened 0.58% against the dollar to last trade at JPY 106.63.

It was a positive day for the benchmark’s major components, with automation specialist Fanuc up 1.5%, fashion firm Fast Retailing eking out gains of 0.04%, and technology conglomerate SoftBank Group ahead 0.39%.

The broader Topix index managed to hold onto gains by the end of trading in Tokyo, rising 0.13% to close at 1,449.15.

On the mainland, the Shanghai Composite was down 0.19% at 2,810.02, having partially recovered from cratering not long after the open, as the smaller, technology-heavy Shenzhen Composite lost 0.32% to 1,732.56.

South Korea’s Kospi was up 0.59% at 1,934.09, while the Hang Seng Index in Hong Kong was ahead 1.22% at 24,576.96.

Banking giant HSBC ended the day up 1.14% in Hong Kong after a choppy session, after it reported a 48% year-on-year fall in pre-tax profits for the first quarter - much worse than the 35.7% decline expected by analysts at Morgan Stanley.

Both of the blue-chip technology stocks were in the green in Seoul, with Samsung Electronics up 0.5% and chipmaker SK Hynix ahead 0.97%.

The ongoing Covid-19 coronavirus pandemic remained front and centre of investors’ minds, with US markets closing in the green overnight as a number of states began to ease, or communicate plans to relax, their lockdown measures.

“While stocks have continued to take comfort from the largesse of central banks the economic data has gone from bad to worse and unlikely to get better in the short term, which means that investors appear to be banking on a quick return to normal as governments slowly relax restrictions,” said CMC Markets analyst Michael Hewson.

“This seems unlikely though the approach of the summer months, and warmer temperatures may well help keep a lid on a rise in infection rates in the short term.”

More than three million cases of the virus have now been confirmed worldwide, with the number of deaths now topping 208,000, according to data from John Hopkins University.

Oil prices were mixed as the region went to bed, with Brent crude staging a recovery, rising 0.75% to $20.14 per barrel, while West Texas Intermediate lost 10.08% to $11.61.

The drop in prices for the thick black stuff followed a 24% plunge in West Texas Intermediate’s June contract overnight, after the retail investor-focussed United States Oil Fund said it would sell all of its June contracts from Monday, preferring longer-term plays.

In Australia, the S&P/ASX 200 lost 0.16% by end-of-play in Sydney, settling at 5,3113.10.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was up 3.26% at 10,759.56, having returned from a public holiday on Monday, and as the country entered a new, more relaxed Covid-19 lockdown period.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.64% at AUD 1.5370, and the Kiwi advancing 0.3% to NZD 1.6486.