Asia report: Markets up after disappointing nonfarm report

Markets in Asia were higher on Monday, with investors expressing their relief as the prospect of a September US interest rate hike from the Federal Reserve dampened with the disappointing nonfarm payrolls report for August.

In Japan, the Nikkei 225 was up 0.66% at 17,037.63 - its highest level in three months.

The yen was stubbornly clinging to the 103 level against the greenback, and was last 0.5% stronger at JPY 103.4 per $1.

Bank of Japan Governor Haruhiko Kuroda told a seminar during the day that the central bank was maintaining “ample room” for further monetary easing, adding “new ideas should not be off the table.

He also strongly disagreed with analyst views that the country’s monetary policy had reached its limits.

On the mainland, the Shanghai Composite was up 0.18% at 3,072,79, and the Shenzhen Composite grew 0.44% to 2,018.10.

China’s Caixin services purchasing managers’ index rose to 52.1 for August on a seasonally-adjusted basis, up from 51.7 in the prior month.

Hong Kong’s Hang Seng Index finished up 1.65% at 23,649.55, while in Seoul the Kospi was 1.07% higher by the close, at 2,060.08.

South Korea’s beleaguered Hanjin Shipping was down 13.71%, after trading was suspended for six days.

The shipping line, which has been haemorrhaging cash, had its capital flows cut off by its banks last week, leading to a number of vessels being held by port authorities.

It has filed for bankruptcy protection in the US to prevent creditors from seizing its ships, however.

Shares in technology giant Samsung Electronics were up 0.56%, having lost 3% last week after it announced a total recall of its latest smartphone, the Galaxy Note 7, because the batteries are prone to combusting.

“The recall plan will give consumers various options, including a full refund,” noted Nomura AEJ.

“Samsung has put customer safety and brand image before a short-term loss burden … but we are still unsure whether it is enough to attract those consumers who may change their minds about buying the Note 7.”

Oil prices were down during Asian trade, though it was rebounding strongly as Europe took the trading baton.

Brent crude was last up 4.2% at $48.90, and West Texas Intermediate added 3.8% at $46.19.

“Friday's non-farm payrolls report noticeably underperformed market expectations and effectively killed off the outside possibility of a September rate hike by the Fed,” noted IG market analyst Angus Nicholson.

“Investors [are] in a contradictory situation as to whether they should be focusing on rates settings or the underlying economy.”

Australia’s S&P/ASX 200 added 1.06% to 5,429.58, with the core materials, energy and financials subindexes up 2,27%, 1.07% and 1.46% respectively.

Shares of major aged care providers were under serious pressure, however, after the Department of Health warned them they are not allowed to make residents pay for capital maintenance and refurbishment.

Japara Healthcare lost 14.71%, Estia Health was off 11.75% and Regis Healthcare was off 16.67% by end-of-play in Sydney.

In New Zealand, the S&P/NZX 50 added 0.9% to finish at 7,491.94, led by honey exporter Comvita, which added 6%.

The manuka honey producer announced plans to acquire 51% of its Chinese distributor, which will also see the owners of Shenzhen Comvita Natural Food Co increase their holding in Comvita to over 11%, in an all-stock deal worth NZD 30m.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.33% at AUD 1.3163 and the Kiwi strengthening 0.39% at NZD 1.3656 per $1.