Asia report: Markets mostly lower as investors await Fed

Markets in Asia ended Tuesday mostly lower, ahead of the release of important US data later in the week, and as concern the Fed may raise interest rates at its April meeting continued.

The Nikkei 225 in Japan ended down 0.18% at 17,103.53, while the Topix slipped 0.31% to 1,377.60.

Oil price losses led to declines in Japanese energy stocks, with Inpex falling 1.96%.

Fresh data out in the island nation showed household spending rising 1.2% year-on-year in February, while its seasonally-adjusted jobless rate for the month was 3.3%. That was slightly above the Reuters-polled 3.2% forecast.

In Seoul, the Kospi was up 0.62% to 1,994.91, and in Hong Kong the Hang Seng Index reversed earlier losses to finish up 0.1% at 20,366.30.

Markets in China ended the day lower, with the Shanghai Composite Index down 1.26% to 2,920.54, and the smaller Shenzhen Composite falling 1.82% to 1,840.50.

Energy plays in the People’s Republic weren’t immune to the oil prices either, with mainland shares in Sinopec slipping 0.15%.

Investors were looking towards a speech from US Federal Reserve chair Janet Yellen at the Economic Club of New York later on Tuesday. Her comments were coming after indications from a number of Fed officials recently that a rate hike was on the cards.

“Until there is something more from the Fed, the markets will be in wait and see mode,” said Julius Baer head of Asia research Mark Matthews.

Oil prices were down during Asian trading, and continued their decline as the region went to bed. Brent crude was last down 2.05% at $39.46 per barrel, while West Texas Intermediate lost 1.63% to $38.76.

Down under, the S&P/ASX 200 lost 1.57% to finish at 5,004.51, with declines in financials dragging on the index as traders returned from a four-day Easter break.

Of the ‘Big Four’ Australasian banks on the Sydney market, Australia and New Zealand Banking Group lost 3.58%, Commonwealth Bank of Australia slipped 2.38%, National Australia Bank was down 2.59% and Westpac slid 3.05%.

ANZ had warned late last week that it was looking at higher bad debt charges than previously expected due to its exposure to the resources sector. Westpac had also indicated bad debts could be on the rise.

IG market strategist Evan Lucas said resource and energy made up around 1.5% of total bank exposures for the Big Four, with NAB, Westpac and ANZ all due to report first half earnings within the next month or two.

"Expectations would be for NAB to join Westpac and ANZ in 'confessing,' its provisioning for bad and doubtful debt will have to increase based on current information from resource firms," he noted.

Energy equities in Australia were also down with the retreating oil prices, with Santos paring back gains to close flat, Oil Search dropping 0.74% and Woodside Petroleum slipping 1.11%.

Further east, New Zealand traders also came back from an extended Easter weekend to yet another record high on the S&P/NZX 50 benchmark, which rose 0.2% to 6,676.33.

Energy was mixed in Wellington, with Z Energy among the leaders on the bourse with a 3.6% gain after announcing it had settled a dispute with NZ Customs, while the New Zealand Refining Company lost 0.65%.

The Australasian banks were also down in New Zealand, with ANZ dropping 2.7%, Westpac shedding 2.9% and AMP dipping 0.5% in Wellington.

In currencies, the yen crept away from the greenback, and was last 0.17% weaker at JPY 113.64 per dollar. The Aussie also moved away from its American cousin, losing 0.32% to last sit at AUD 1.3299 per USD, while the Kiwi advanced on the US dollar by 0.15% to NZD 1.4849.