Asia report: Markets mostly higher, tech stocks mixed

Markets in Asia finished mostly higher on Thursday, as investors digested a number of developments in the region’s technology sector, and watched for any news on the Covid-19 stimulus front stateside.

In Japan, the Nikkei 225 was up 0.96% at 23,647.07, as the yen managed to strengthen 0.01% against the dollar to last trade at JPY 105.97.

Of the major components on the benchmark index, robotics specialist Fanuc was up 0.03%, Uniqlo owner Fast Retailing added 1.2%, and technology giant SoftBank Group was 1.87% firmer.

The broader Topix index added 0.55% by the end of trading in Tokyo, settling at 1,655.47.

Markets in China remained closed for the spring holiday - no trading has taken place on the mainland since 30 September.

South Korea’s Kospi was ahead 0.21% at 2,391.96, while the Hang Seng Index in Hong Kong was the region’s odd one out, falling 0.2% to 24,193.35.

Chip giant SMIC was down 1.05% in Hong Kong trading, after S&P Global Ratings placed it on a negative credit watch.

According to S&P, SMIC was facing possible supply risks given the likelihood of export restrictions from the US to China.

It said its rating could be lowered if restrictions “significantly disrupt” SMIC’s production of silicon wafers and put a limit on any capacity expansion the firm might wish to undertake.

Among other technology plays in the special administrative region, Alibaba was ahead 0.49% and Tencent was flat, while Xiaomi joined SMIC on the downside, falling 3.92%.

The blue-chip technology stocks were weaker in Seoul, with chipmaker SK Hynix down 0.6% and Samsung Electronics losing 0.33%.

Samsung had reported earlier in the session that it was anticipating a 58% year-on-year improvement in profits for the quarter through September.

The prospect of fiscal stimulus in the midst of the Covid-19 coronavirus crisis in the US was at the fore of trader minds once again, after president Donald Trump tweeted overnight that he would back aid for airlines.

That sent shares in the country’s legacy carriers north on Wall Street, along with low-cost airlines such as JetBlue and Southwest.

American pharmaceuticals giant Eli Lilly also confirmed overnight that it was applying for emergency use authorisation for its Covid-19 antibody treatment from the US Food and Drug Administration (FDA).

“Overnight Asian equity markets are in the green buoyed by the recovery in US equities,” said SquaredFinancial chief market analyst Rony Nehme.

“US futures for now are also in the green too. China will return tomorrow back from their holiday break and we have the ECB minutes later today.

“ECB chief economist Phillip Lane said yesterday that it would be prudent to add monetary support to lift inflation.”

Oil prices were higher as the region went to bed, with Brent crude last up 1.62% at $42.67 per barrel, and West Texas Intermediate ahead 1.45% at $40.53.

In Australia, the S&P/ASX 200 grew 1.09% by end-of-play in Sydney, closing at 6,102.00, as the country’s major banks all advanced.

Australia and New Zealand Banking Group was up 1.26%, Commonwealth Bank of Australia added 0.8%, National Australia Bank advanced 0.86%, and Westpac Banking Corporation was 1.46% firmer.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 added 1.83% to 12,235.92, seeing Wellington’s benchmark reach a new record high close.

The bourse’s major exporters were both in the green, with specialist dairy producer A2 Milk up 1.29%, and medical device maker Fisher & Paykel Healthcare rising 3.42%.

SquaredFinancial’s Nehme also noted that dovish tones from the Reserve Bank of New Zealand put pressure on the Kiwi dollar, with bank officials Young Ha and Christian Hawkesby on tape saying they were actively working on negative rates and the ‘funding for lending’ programme.

“They noted that they would rather be aggressive with stimulus,” he said.

“Since the dovish outcome from the Reserve Bank of Australia this week, the antipodeans were already under pressure.

“In the short-term better risk sentiment and control of the virus in Asia has been supporting AUD and NZD, but focus is now turning to their respective central banks adding to easing in November, which should put a cap on their currencies.”

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.31% at AUD 1.3964, and the Kiwi advancing 0.1% to NZD 1.5182.