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

Asia-Pacific markets closed mostly weaker on Tuesday, as Australia’s central bank held steady on monetary policy in its latest decision.

In Japan, the Nikkei 225 dropped 2.19% to 27,822.12, as the yen weakened 0.22% against the dollar to last trade at JPY 111.17.

Uniqlo owner Fast Retailing plunged 6.92%, while among the benchmark’s other major components, robotics specialist Fanuc was down 2.17% and technology giant SoftBank Group lost 3.81%.

The broader Topix index was 1.33% weaker by the end of trading in Tokyo, closing at 1,947.75.

Earlier in the session, the benchmark Nikkei had dipped its toe into correction territory, having been more than 10% below its high in mid-September.

Mainland China trading was still closed as the ‘Golden Week’ holiday rolled on.

South Korea’s Kospi returned from a holiday on Monday to lose 1.89% to 2,962.17, while the Hang Seng Index in Hong Kong was the region’s odd one out, managing gains of 0.28% to 24,104.15.

The blue-chip technology stocks were on the back foot in Seoul, with Samsung Electronics down 1.37% and SK Hynix 2.1% lower.

“Asian shares were painted red on Tuesday following a broad selloff on Wall Street overnight, as surging oil prices stoked concerns about global inflation,” said FXTM senior research analyst Lukman Otunuga in London on Tuesday morning.

“King dollar drew strength from the risk-off mood while gold prices snapped a three-day uptrend, trading below $1,760 as of writing.”

Otunuga noted that interestingly, European markets had opened on a positive note despite the losses witnessed in Asia, with US futures also inching higher, suggesting Wall Street could claw back losses later in the global day.

“Nevertheless, growing worries about inflation are likely to foster a sense of unease and caution across financial markets.

“Given how consumer prices are already at multi-year highs, persistent signs of rising inflationary pressures may force central banks to tighten policy sooner than expected.”

Oil prices were higher as the region went to bed, with Brent crude last up 0.53% at $81.69 per barrel, and West Texas Intermediate rising 0.32% to $77.87.

In Australia, the S&P/ASX 200 was 0.41% weaker at 7,248.40, as the Reserve Bank of Australia stood pat on its cash rate target at the current record low of 0.1%.

The central bank’s board also decided to keep its bond-buying rate at AUD 4bn per week until at least the middle of February.

Bank governor Philip Lowe said the central scenario is that conditions for a rate hike would not be met before 2024, with the bank “committed” to maintaining its “highly supportive” policy and conditions.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 lost 1.03% to 13,199.99 as the Wellington bourse joined a global tech sell-off.

Medical technology company Fisher & Paykel Healthcare was down 3.3%, while cinema tech firm Vista Group lost 2.6% and payments outfit Pushpay was 2.2% weaker.

The down under dollars were both weaker against the greenback, with the Aussie last off 0.15% at AUD 1.3741, and the Kiwi retreating 0.04% to NZD 1.4361.