Asia report: Markets mixed as Trump ends Iran oil sanction waivers

Markets in Asia finished in a mixed state on Tuesday, as investors reacted to rising oil prices after the Trump administration announced an end to waivers of sanctions on oil from Iran.

In Japan, the Nikkei 225 was up 0.19% at 22,259.74, as the yen strengthened 0.06% against the dollar to last trade at JPY 111.87.

Of the index heavyweights, automation specialist Fanuc was down 0.42% and fashion group Fast Retailing lost 1.84%, while technology conglomerate SoftBank Group was ahead 0.31%.

Energy stocks were in the green as oil prices grew, with Fuji Oil advancing 1.15% and Inpex adding 2.78%.

The broader Topix index improved 0.27% in Tokyo, finishing its day up 0.27% at 1,622.97.

On the mainland, the Shanghai Composite lost 0.51% to close at 3,198.59, and the smaller, technology-heavy Shenzhen Composite fell 1.32% to 1,728.86.

The losses in China came after a report on Monday that suggested Beijing was looking to focus on structural reforms, rather than pouring more stimulus into the country’s flagging economy.

Administrators were mulling over options after the People’s Republic reported better-than-expected economic growth in the first quarter of 2019, according to the South China Morning Post.

South Korea’s Kospi was 0.17% firmer at 2,220.51, while the Hang Seng Index in Hong Kong was flat, losing just 0.02 points to finish the day at 29,963.24.

Technology giant Samsung Electronics was down 0.33% in Seoul, after it confirmed it was delaying its much-awaited Galaxy Fold smartphone.

The device was faced with criticism from reviewers after the firm shipped them early units last week, as it emerged the phone’s key feature - its ‘foldable’ screen - was suffering a high rate of failure.

Korea’s other blue-chip technology stock, chipmaker SK Hynix, was 0.62% higher by end-of-play, while energy stock SK Innovation was ahead 1.84%.

Crude prices had surged near six-month highs on Monday, after the White House confirmed oil buyers would need to stop importing from Iran in early May, cancelling sanction waivers on the thick black stuff.

Analysts did not mince words over the surprise nature of the announcement, with OCBC Treasury Research saying the administration had “pulled a shocker” in declaring no renewal of sanction waivers to all eight countries that were exempted.

“The non-renewals come as a surprise because ahead of the US elections next year, many expected the Trump administration to prioritise keeping gasoline prices low against keeping a strong stance on international diplomacy,” they noted.

Those oil prices continued to rise as the region went to bed, with Brent crude last up 0.4% at $74.34 per barrel, and West Texas Intermediate advancing 0.65% to $65.98.

In Australia, the S&P/ASX 200 was 0.95% higher at 6,319.40, with the energy subindex adding 2.54% alongside the rise in oil prices.

Of the major oil plays on the Sydney bourse, Beach Energy was ahead 4.21%, Santos added 3.05% and Woodside Petroleum was 2.55% firmer.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 broke the 10,000 point psychological milestone as it returned from its Easter long weekend, rising 0.5% to close at 10,004.84.

In the last 10 years, the Wellington benchmark had growin 284%.

It was led higher on Tuesday by Restaurant Brands, which holds master franchises for popular American chains in a number of countries, as its shares rebounded 4% from lows sustained when it cancelled its dividend last week.

Both of the down under dollars were weaker on the greenback, with the Aussie last off 0.33% at AUD 1.4064, and the Kiwi retreating 0.31% to NZD 1.5016.