Asia report: Markets rise as investors pin hopes on Hillary

Markets in Asia mostly ended higher on Tuesday in sessions that bobbed above and below the waterline, as investors turned towards the US presidential election.

Japan’s Nikkei 225 lost 0.03% to 17,171.38, with the yen weakening during the session - it was last off 0.04% against the greenback at JPY 104.50 per $1.

Printing equipment maker Brother Industries leapt 7.38% during the session after it increased its operating profit outlook for the year to March 2017 by 13.4% to JPY 55bn, as a result of cost cutting.

On the mainland, the Shanghai Composite finished 0.47% higher at 3,148.02, while the Shenzhen Composite was 0.66% firmer at 2,080.44.

Fresh data from Beijing during the day showed China’s dollar-denominated exports fell 7.3% year-on-year in October, though that was still an improvement on September’s 10% measure.

Dollar-denominated imports were down 1.4% in the same period.

Foreign exchange reserves in the People’s Republic were also down $45.7bn to $3.12trn, which was the biggest drop in the official reading for nine months.

“This suggests a modest degree of intervention to slow the pace of yuan depreciation, on top of negative valuation effects,” noted Mizuho Bank foreign exchange strategist Chang Wei Liang.

“Market attention will be on dollar/yuan today given the decline in reserves and the release of Chinese trade data.”

In South Korea, the Kospi was off 0.29% to 2,003.38, while Hong Kong’s Hang Seng Index was up 0.47% at 22,909.47.

Seoul’s Samsung Electronics saw its share price rise 0.24% during the session after reports of prosecutors raiding the firm’s offices, as part of the investigation into Korean president Park Geun-hye and the influence she allowed those close to her to have politically.

Monday’s news that the Federal Bureau of Investigation had cleared Democratic presidential candidate Hillary Clinton over her use of a private email server was still having an effect, underpinning global markets.

“The view is we see the Democrats take back the Senate and the Republicans retaining the House, although the race for the Senate in actuality is a 50/50 proposition,” noted IG chief market strategist Chris Weston.

Oil prices were surprisingly stable after surging in US trading overnight, with Brent crude last up 0.9% at $46.59 and West Texas Intermediate adding 0.64% at $45.18.

In Australia, the S&P/ASX 200 added 0.13% to 5,257.79, pulling back some earlier gains of more than 0.3%.

The benchmark was underpinned by its energy subindex, up 1.49%, and materials, which rose 1.43%, though the hefty financials sector lost 0.59%.

Business conditions in the sunburnt country apparently softened in October, according to National Australia Bank’s survey of more than 500 companies.

Fertiliser and explosives manufacturer Incitec Pivot was off 1% after it reported a 26% drop in annual underlying profit compared to a year ago.

The company also cautioned that it expected markets for its primary product groups to remain softer in the coming year.

Commonwealth Bank of Australia also saw its stock fall, by 0.63% after flat first quarter results.

The bank - one of the ‘big four’ in Australia and New Zealand - said the result was a product of margin pressures, as funding costs rose.

New Zealand’s benchmark S&P/NZX 50 added 0.3% to 6,894.35, led higher by specialist dairy exporter The A2 Milk Company, which rose 4.6%.

The firm reported first quarter sales of NZD 112.5m, in line with expectations, with infant formula and milk driving the company’s growth.

Both of the down under dollars were weaker against the greenback, with the Aussie last off 0.21% at AUD 1.2968 and the Kiwi retreating 0.02% to NZD 1.3617 per $1.