Asia report: Markets mostly lower as hopes for trade resolution fade

Most markets in Asia finished in the red on Thursday, as trade tensions between the US and China continued to fray on both sides of the Pacific Ocean.

In Japan, the Nikkei 225 was down 0.62% at 21,151.14, as the yen strengthened 0.3% against the dollar to last trade at JPY 110.03.

Of the major components on the Tokyo benchmark, automation specialist Fanuc was up 0.03% and fashion firm Fast Retailing added 0.55%, while technology conglomerate SoftBank tumbled 5.3%.

SoftBank was dealt a particular blow by news that the US Department of Justice was recommending blocking a merger deal between US cellular networks Sprint Corporation and T-Mobile US.

SoftBank owns around 80% of the loss-making Sprint.

It was hopeful for a resolution to the merger question with T-Mobile - the majority of which is owned by German firm Deutsche Telekom - after the Federal Communications Commission indicated its willingness to approve the plans earlier in the week.

The broader Topix index was off 0.36% by the end of Japanese trading, closing at 1,540.58.

On the mainland, the Shanghai Composite was 1.36% lower at 2,852.52, and the smaller, technology-heavy Shenzhen Composite tumbled 2.43% to close at 1,503.37.

Market attention in and around China was still very much on privately-held telecoms technology giant Huawei Technologies, which became the subject of US trading restrictions last week.

That led to Alphabet division Google revoking the company’s license to use the official version of Android in its consumer handsets - though the Commerce Department did allow it a temporary reprieve.

It also saw UK mobile networks Vodafone and EE - owned by BT - pulling Huawei handsets from their 5G launch ranges, set to be rolled out later in the year.

Asia-based companies affected by Huawei’s woes include Taiwan’s Hon Hai Precision Industry, which trades as Foxconn, as well as Taiwan Semiconductor Manufacturing Company.

Hong Kong smartphone camera technology provider Sunny Optical joined the Taiwanese firms on the red side of their stock markets on Thursday.

South Korea’s Kospi was off 0.26% at 2,059.59, while the Hang Seng Index in Hong Kong lost 1.58% to settle at 27,267.13.

The blue-chip technology stocks were once again mixed in Seoul, with Samsung Electronics up 0.8%, while chipmaker SK Hynix lost 1.31%.

Samsung shareholders appear to be cheering the ongoing Huawei troubles, given the Chinese firm is its largest competitor in the smartphone space, and had been making good ground on the Korean leader in global market share statistics in recent quarters.

In trade developments, hopes for some sort of resolution to the ongoing trade war between Washington and Beijing continued to fade on Thursday.

US Treasury Secretary Steven Mnuchin told CNBC overnight that a visit to Beijing for a resumption of the tense trade negotiations had not yet been scheduled.

Oil prices were lower as the region went to bed, with Brent crude last down 1.69% at $69.81 per barrel, and West Texas Intermediate off 1.76% at $60.36.

In Australia, the S&P/ASX 200 slid 0.29% to 6,491.80, while across the Tasman Sea, New Zealand’s S&P/NZX 50 went against the regional trend, adding 0.3% to close at 10,263.41.

Both of the down under dollars were weaker on the greenback, with the Aussie last off 0.16% at AUD 1.4556, and the Kiwi retreating 0.13% to NZD 1.5416.