Asia report: Markets mixed on trade talks as Oz gets another new PM

Markets in Asia finished mixed on Friday, as investors swung back into a cautious mode over the ongoing war of tariffs between the US and China, and as Australia gained its sixth prime minister in eight years amid political infighting in Canberra.

In Japan, the Nikkei 225 was up 0.85% at 22,601.77, as the yen weakened 0.13% against the dollar to last trade at JPY 111.44.

Tokyo traders were busy earlier in the session digesting inflation data released before the open, with consumer prices rising 0.8% year-on-year in July but remaining stable month-on-month.

The reading was just shy of expectations, and well off the Bank of Japan’s intended 2% inflation target.

On the mainland, the Shanghai Composite was 0.18% higher at 2,729.43, and the smaller, technology-heavy Shenzhen Composite slid 0.23% to 1,460.33.

South Korea’s Kospi was ahead 0.46% at 2,293.21, while the Hang Seng Index in Hong Kong fell 0.43% to 27,671.87.

Most of the blue-chip plays were higher in Seoul, though technology behemoth Samsung Electronics fell 0.1%.

Trade talks ended overnight in Washington, with officials from the US and China failing to make any major developments in the ongoing tit-for-tat tariff battle between the nations.

A fresh round of all-American tariffs, of 25% on $16bn of Chinese goods, came into effect on Thursday, leading to the People’s Republic instituting its own 25% fee on a retaliatory list.

Oil prices were higher, with Brent crude last up 0.82% at $75.35 per barrel, and West Texas Intermediate rising 0.91% to $68.45.

In Australia, the S&P/ASX 200 eked out gains of 0.05% to close at 6,247.30, giving up earlier gains as news came in that the federal treasurer Scott Morrison had ousted incumbent prime minister Malcolm Turnbull in a leadership spill.

Morrison won a three-way for the premiership, beating off foreign minister Julie Bishop and ex-home affairs minister Peter Dutton, who had failed in a bid for the leadership earlier in the week when he went at it by himself.

“This is likely to be a relief to business and markets as Morrison, as more of a known quantity, will be perceived as less likely to make radical shifts in policy than if Peter Dutton had been elected,” noted National Australia Bank’s chief economist Ivan Colhoun.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was ahead 0.2% at 9,159.63, led higher by oil refiner New Zealand Refining, which was up 3.6%.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.44% at AUD 1.3737, and the Kiwi advancing 0.18% to NZD 1.5041.