Asia report: Markets mostly higher as semiconductor stocks surge

Markets in Asia were mostly higher on Thursday, with technology - in particular, semiconductor - stocks in South Korea and Japan well into the green.

In Japan, the Nikkei 225 was up 0.22% at 21,756.55, as the yen strengthened 0.09% against the dollar to last trade at JPY 108.09.

Of the major components on the benchmark index, automation specialist Fanuc was up 0.13% and technology conglomerate SoftBank Group rose 1.8%, while fashion firm Fast Retailing slid 0.96%.

Semiconductor test equipment company Advantest rocketed 20.23% by end-of-play.

The broader Topix index was 0.18% firmer in Tokyo, to finish the session at 1,577.85.

On the mainland, the Shanghai Composite was 0.48% higher at 2,937.36, and the smaller, technology-heavy Shenzhen Composite advanced 0.63% to 1,572.80.

South Korea’s Kospi was down 0.38% at 2,074.48, while the Hang Seng Index in Hong Kong managed gains of 0.25% at 28,594.30.

Both of the blue-chip technology stocks were higher in Seoul, with Samsung Electronics up 1.72% and chipmaker SK Hynix ahead 2.06%.

The chip manufacturer had announced a reduction in output during the day, following an 89% fall in its operating profit as a result of falling memory chip prices.

Samsung, meanwhile, suggested a September launch date for its ‘Galaxy Fold’ smartphone, following a false start for the device earlier in the year after a number of technology reviewers reported it as breaking easily.

Chemicals firm LG Chem was well into the red, sliding 4.95%.

Towards the end of the Asian day, investors looked towards Europe for direction, ahead of the European Central Bank’s latest monetary policy verdict later in the global day.

“Although European policymakers are expected to maintain the interest rates unchanged at today’s meeting, president Mario Draghi will likely deliver a dovish accompanying statement, as the ECB is faced with slowing economic activity, waning inflation expectations, topped up with souring Brexit negotiations,” said London Capital Group senior market analyst Ipek Ozkardeskaya.

He explained that there “could be more in Draghi’s hat”, however noting that Markit’s manufacturing PMI - released on Wednesday - fell to a seven-year low in July, despite the rising dovish policy outlook.

“In the past, this low PMI reads have been followed by a surprise ECB action,” Ozkardeskaya said.

“The activity in eurozone sovereign markets indicate that the probability of a 10-basis-point rate cut jumped to 54.2% at today’s meeting.”

Oil prices were higher as the region went to bed, with Brent crude last up 1.02% at $63.83 per barrel, and West Texas Intermediate adding 0.99% to $56.44.

In Australia, the S&P/ASX 200 rose 0.61% to close its trading day at 6,818.00, as most subindices in Sydney managed to finish in the green.

Reserve Bank of Australia governor Philip Lowe renewed expectations for ongoing easing in the sunburnt country in a speech during the day.

“It is reasonable to expect an extended period of low interest rates,” the central bank head said.

The RBA had cut the country’s official cash rate for two months on the trot now, bringing it to a record low 1%.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 bounced 0.8% to close at a fresh record high of 10,898.28, led higher by oil processor New Zealand Refining, which was ahead 2.8%.

Both of the down under dollars were weaker on the greenback, with the Aussie last off 0.11% at AUD 1.4349, and the Kiwi retreating 0.3% to NZD 1.4956.