Asia report: Markets mostly higher after China inflation data

Markets in Asia finished mostly higher on Thursday, as investors digested the latest inflation data out of China, and continued to monitor the ongoing Covid-19 coronavirus pandemic globally.

In Japan, the Nikkei 225 was up 0.4% at 22,529.29, as the yen weakened 0.07% against the dollar to last trade at JPY 107.34.

Of the major components on the benchmark index, robotics specialist Fanuc was up 1.6%, Uniqlo owner Fast Retailing added 0.37%, and technology giant SoftBank Group surged 4.52%.

The broader Topix index was broadly flat, adding just 0.01 points to end its trading day at 1,557.24 in Tokyo.

On the mainland, the Shanghai Composite was ahead 1.39% at 3,450.59, and the smaller, technology-focussed Shenzhen Composite leapt 2.7% to 2,257.95.

In fresh inflation data out of China early in the session, the country’s producer price index was down 3% year-on-year in June, compared to expectations for a 3.2% decline according to analysts polled by Reuters.

The consumer price index, meanwhile, fell in line with Reuters-polled expectations, rising 2.5% year-on-year for the month.

South Korea’s Kospi added 0.42% to 2,167.90, while the Hang Seng Index in Hong Kong advanced 0.31% to 26,210.16.

Both of the blue-chip technology stocks were weaker in Seoul, with Samsung Electronics down 0.38% and chipmaker SK Hynix off 0.84%.

The ongoing coronavirus pandemic - and particularly its spread in the United States - remained at the top of the agenda on Thursday, as the number of confirmed infections in that country surpassed three million, according to Johns Hopkins University.

At the same time, data released by Apple suggested Americans were driving less as the threat of Covid-19 widened, pouring cold water on some hopes for the consumer side of the economy.

On a global basis, almost 12 million people are confirmed to have been infected, with nearly 550,000 deaths, researchers at Johns Hopkins said overnight.

“A rise in cases in Hong Kong has added to the growing list of places where the virus has seen a resurgence, although for the time being indices are content to hold their ground, avoiding much downside for the time being,” said Chris Beauchamp, chief market analyst at IG.

“But with breadth weakening across indices we may be poised for some near-term downside, particularly if earnings season starts off on a poor footing.”

Oil prices were in a mixed state at the end of the Asian day, with Brent crude last up 0.23% at $43.39 per barrel, while West Texas Intermediate lost 0.22% to $40.81.

In Australia, the S&P/ASX 200 managed gains of 0.59% to 5,955.50, as the big four banks put in a mixed performance.

Australia and New Zealand Banking Group was up 0.43%, National Australia Bank added 0.44%, and Westpac Banking Corporation was 0.39% stronger, while Commonwealth Bank of Australia lost 0.2%.

Rio Tinto enjoyed a healthy rise on the Sydney market, closing 3.28% higher by the end of trading, after it announced plans to close its loss-making New Zealand aluminium operation.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 went against the regional trend, falling 2.28% to 11,440.88.

The Wellington bourse was led lower by energy generators, with Contact Energy down 14%, Meridian off 10.8%, Mercury NZ falling 3.5%, Genesis Energy losing 7.9%, and Trustpower 3% weaker.

Those moves came the Anglo-Australian mining giant, Rio Tinto, confirmed it would close its New Zealand Aluminium Smelters division - the country’s largest single electricity consumer - and give notice to terminate its energy contract with Meridian from 2021.

Both of the down under dollars were marginally stronger on the greenback, last advancing 0.03% in unison to AUD 1.4321 and NZD 1.5202.