Asia report: Markets mostly lower as Xi heads to Florida

Markets in Asia were mostly lower on Thursday, with traders turning their attention to what was promising to be a tense meeting between Chinese President Xi Jinping and his US counterpart Donald Trump in Florida, later in the day.

Japan’s Nikkei 225 was down 1.4% at 18,597.03 and the broader Topix was off 1.63% to 1,480.18, as the yen retained its relative strength against the greenback, maintaining its hold on the JPY 110 level.

It was last marginally weaker, retreating 0.08% to JPY 110.79.

On the corporate front in Japan, reports emerged that Toshiba had fired the chairman of Westinghouse Electric before the failing US nuclear development acquisition fired for bankruptcy last week.

Toshiba as a whole was facing a cash crisis, having delayed its quarterly reporting twice already and filing the bankruptcy motion to stem losses at its US subsidiary, whilst also seeking investors for a spun-out valuable memory chip arm.

Its shares closed down 0.05%.

The major exporters were also on the back foot as the yen remained strong, with Honda down 1.93% and Toyota off 1.68%.

Markets on the mainland went against the regional trend, with the Shanghai Composite finishing up 0.35% at 3,281.60, and the Shenzhen Composite 0.3% ahead at 2,029.21.

Fresh data suggested China’s services sector was growing at its slowest rate in half a year, with the Caixin Purchasing Managers’ Index coming in at 52.2 for March - less than the 53.2 forecast.

In South Korea, the Kospi was off 0.37% at 2,152.75, while Hong Kong’s Hang Seng Index fell 0.52% to 24,273.72.

Carmakers in Korea were suffering alongside their Japanese peers, with Hyundai Motor off 1% and Kia Motors 0.28% lower.

Analysts had recently pointed out that falls in car sales in both the US and China - major export markets for the Korean manufacturers - would hit the sector particularly hard.

US President Trump was due to welcome Chinese President Xi Jinping at his Mar-a-Lago golf club later on Thursday US time, and had indicated earlier in the week that North Korea would be top of the agenda.

The belligerent state had launched yet another ballistic missile test this week.

Trump also wanted to talk trade, having spent much of his 2016 campaign repeating rhetoric on the country’s trade deficit, though analysts were sceptical that any major step forward would be achieved at the meeting.

“[Markets are] keeping expectations low for tangible outcomes in regards to trade and currency from the meeting,” noted analysts at DBS.

“In particular, the yuan forwards' discount to the spot prices remains stable.

“It suggests investors see Trump's tough talk on currency manipulation a limited impact on Beijing's currency regime.”

Oil prices were somewhat lower during Asian trading, though they picked up again in early European hours, with Brent crude last up 0.22% at $54.48 per barrel and West Texas Intermediate 0.14% higher at $51.22.

Australia’s S&P/ASX 200 finished 0.34% lower at 5,856.29, with the weighty financials subindex and the telecommunications sector dragging the benchmark lower.

Across the Tasman Sea, the S&P/NZX 50 added 0.4% to reach 7,289.53 - the highest level for the benchmark in six months.

Dairy exporter and infant food manufacturer A2 Milk was once again a favourite, adding 3.3%.

It was another mixed day for the down under dollars, with the Aussie last 0.11% weaker against the greenback at AUD 1.3228, while the Kiwi strengthened 0.21% to NZD 1.4331 per $1.