Asia report: Markets mostly lower as RBA stands pat on rates

Markets in Asia finished mostly lower on Tuesday after a mixed session on Wall Street overnight, after Australia’s central bank stood pat on interest rates as widely expected.

In Japan, the Nikkei 225 lost 0.37% to 22,622.38, as the yen weakened 0.16% to JPY 112.59 against the dollar.

On the mainland, the Shanghai Composite was off 0.2% at 3,303.04, and the smaller, technology-heavy Shenzhen Composite closed down 1.88% at 1,866.98.

South Korea’s Kospi finished the day ahead 0.34% at 2,510.12, while the Hang Seng Index in Hong Kong dropped 1.01% to 28,242.80.

Attention was turned stateside as usual early in the session, with traders still trying to decipher the likely way forward for Republican tax cuts, along with economic data from the country in the form of the ISM non-manufacturing reading.

“[Investors] look to be taking their lead from the likelihood of Congress agreeing on tax cuts and, last night, another positive US economy data print,” noted National Australia Bank director of economics and markets David de Garis.

Oil prices were flat during much of the Asian session, before falling as the trading baton was handed to Europe, with Brent crude last down 0.39% at $62.21 per barrel and West Texas Intermediate off 0.65% at $57.10.

In Australia, the S&P/ASX 200 was 0.23% softer at 5,971.82, with the hefty financials subindex finishing 0.49% lower.

The country’s major banks were on the back foot, with Australia and New Zealand Banking Group off 0.99%, Commonwealth Bank of Australia falling 0.23%, National Australia Bank down 0.37% and Westpac Banking Corporation sliding 1.09%.

Interest rates were left unchanged by the Reserve Bank of Australia, with the official cash rate remaining at 1.5% as expected.

The central bank’s governor Philip Lowe said in his statement that, while economic conditions around the world had improved over the last year, labour markets were tightening with wage growth still at the bottom end in many nations.

He said ie expected wage growth to remain low in Australia for “a while yet, although the stronger conditions in the labour market should see some lift in wage growth over time”.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was down 0.1% at 8,176.21, led lower by accounting software giant Xero, which closed down 2.6%.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.54% at AUD 1.3090 and the Kiwi advancing 0.49% at NZD 1.4510.