Asia report: Markets mixed on oil rise, China data

Markets in Asia ended Wednesday mixed, despite rising oil prices and indications that China’s flagging services sector was picking up.

Japan’s Nikkei 225 was off 0.11% at 15,715.36, with the yen pulling back from overnight levels. It was last trading 0.1% weaker at JPY 110.45 to the US dollar.

The exporters ended the day mixed, with Toyota up 0.33%, Nissan adding 0.95% and Honda ahead 1.02%, while Sony finished the day down 1.13%.

"Most Japanese corporations are hedged at 115 so they are bleeding profits at 110 and lower,” said BK Asset Management managing director of FX strategy Kathy Lien.

On the mainland, the Shanghai Composite was largely flat at 3,050.72 while the Shenzhen Composite finished up 0.54% at 1,961.70.

China’s markets were boosted after fresh data indicated a strengthening of the services sector in March. The Caixin services purchasing managers’ index - which focuses on smaller and medium-sized enterprises - rose to 52.2, from 51.2 in February.

The official reading out of Beijing, which looks at large firms, showed a rise last week as well to 53.8 from 52.7 a month earlier. A reading above 50 indicates expansion.

Before markets opened, the People’s Bank of China set renminbi at CNY 6.4754 per USD, and it traded flat through much of the day. The yuan is allowed to trade 2% either side of the loose peg.

In Korea, the Kospi was up 0.44% at 1,971.31, while the Hang Seng Index in Hong Kong finished up 0.15% at 20,206.67.

The region was quieter after the global sell-off on Tuesday. National Australia Bank’s global co-head of foreign exchange strategy Ray Attrill said there was no obvious reason for the sell-off.

"Rather, we'd gauge that stock investors are retreating back into their shells ahead of the U.S. first quarter earnings seasons that kicks off in earnest next Monday," Attrill said.

Oil prices were ahead during Asian trading, with Brent crude last up 2.17% at $38.70 per barrel and West Texas Intermediate ahead 2.87% at $36.95.

The strengthening came after reports that oil producers meeting in Doha later this month were likely to agree to a draft freeze deal penned by several producers.

Down under, the S&P/ASX 200 was up 0.44% to 4,945.90. It was led by the energy subindex, which rocketed 3.19%.

Santos was up 3.94%, while Woodside Petroleum surged 2.84%. Energy’s gains were offset by the banks, particularly Westpac, which lost 1.54%.

On Tuesday, the Australian Securities and Investments Commission began legal proceedings against Westpac for "unconscionable conduct and market manipulation in relation to Westpac's involvement in setting the bank bill swap reference rate in the period 6 April 2010 and 6 June 2012."

New Zealand markets rose, with the S&P/NZX 50 gaining 0.3% to 6,734.27, on the same day as the market was described as “overly expensive” by Nikko Asset Management’s head of equities Stuart Williams.

Speaking at Nikko’s 2016 Investment Summit, Williams pointed to the fact that the current price-to-earnings ratio was 18.5, compared to a five year average of 16.2.

The antipodean currencies were mixed, with the Aussie moving closer to the greenback, last 0.05% stronger at AUD 1.3249 per dollar, while the Kiwi slid away and was last 0.22% weaker at NZD 1.4731.