Asia report: Markets mostly lower on Trump impeachment news
Markets in Asia finished their sessions mostly lower on Wednesday, with much investor attention focussed on the United States as impeachment proceedings were launched against president Donald Trump overnight.
In Japan, the Nikkei 225 was down 0.36% at 22,020.15, as the yen weakened 0.35% against the dollar to last trade at JPY 107.44.
Of the major components on the benchmark index, automation specialist Fanuc was down 2.99%, fashion firm Fast Retailing lost 1.15%, and technology conglomerate SoftBank Group was 2.29% weaker.
The broader Topix index was in the red by 0.18% by the close of play in Tokyo, settling at 1,620.08.
On the mainland, the Shanghai Composite lost 1% to close at 2,955.43, and the smaller, technology-heavy Shenzhen Composite was off 1.61% at 1,638.77.
South Korea’s Kospi was 1.32% weaker at 2,073.39, while the Hang Seng Index in Hong Kong fell 1.28% to 25,945.35.
Both of the blue-chip technology stocks were in the red in Seoul, with Samsung Electronics down 1.21% and chipmaker SK Hynix losing 1.8%.
Political developments in Washington hogged the agenda early in the session, after United States House Speaker Nancy Pelosi announced an impeachment inquiry into Donald Trump.
That came after reports emerged that the president had made a phone call to Ukraine leader Volodymyr Zelensky earlier in the year, allegedly putting pressure on Zelensky to investigate the family of prominent US Democrat politician Joe Biden.
Trump has confirmed he made the phone call, but has refuted the allegations around asking for a Biden investigation, promising on Tuesday that he would release the call’s full transcript.
“The political turmoil around Donald Trump’s official impeachment inquiry, combined to rising fears of a no agreement with China in October trade talks turned the risk sentiment off across the global markets,” said London Capital Group senior market analyst Ipek Ozkardeskaya.
US-China trade was also in the mix, after the president said overnight that he was not prepared to accept a “bad deal” with Beijing.
That followed comments from Chinese foreign minister Wang Yi, who said authorities in China were expecting Washington to “remove all unreasonable restrictions”.
China and the US are expected to enter another round of negotiations in the next few weeks, in a bid to end their ongoing tit-for-tat of punitive import tariffs.
“Some good news from China, who said it is preparing to buy more pork from the US amid pork prices went through the roof after African swine fever decimated a third of China’s pig population this year,” Ozkardeskaya added.
“It is unsure whether China’s increased pork purchases from the US farms would suffice to improve the outcome of the upcoming US-China meeting, but it sure won’t cause any harm.”
Oil prices were lower as the region went to bed, with Brent crude last down 2.27% at $61.70 per barrel, and West Texas Intermediate off 1.92% at $56.21.
In Australia, the S&P/ASX 200 slid 0.57% to end its trading session at 6,710.20, while across the Tasman Sea, New Zealand’s S&P/NZX 50 bucked the regional trend, rising 0.03% to close at 10,861.44.
The Reserve Bank of New Zealand stood pat on interest rates during the day, keeping the official cash rate at a record low 1%, after making a larger-than-expected cut in August.
“There remains scope for more fiscal and monetary stimulus,” the central bank said in its statement, leaving the door open for more easing.
Both of the down under dollars were weaker on the greenback, with the Aussie last off 0.54% at AUD 1.4783, and the Kiwi retreating 0.4% to NZD 1.5875.