Asia report: Most markets higher as Chinese inflation slows

Markets in Asia finished higher on Tuesday, with fresh data showing slower inflation in China and the Reserve Bank of India standing pat on monetary policy.

Japan’s Nikkei 225 was up 0.69% to 16,764.97, while the yen traded slightly stronger against the greenback.

It was last ahead 0.27% at JPY 102.17 per $1.

On the mainland, the Shanghai Composite was up 0.72% at 3,025.91, while the Shenzhen Composite added 1.04% at 1,982.66.

Fresh data from the National Bureau of Statistics showed consumer inflation rising 1.8% year-on-year in the People’s Republic, with producer prices falling 1.7%.

“As food price inflation may continue to ease on the back of falling pork and fresh vegetable prices, we expect full year CPI inflation to remain comfortably below the 3 percent government target,” read a note from HSBC.

“This leaves ample room for monetary easing.”

It was the first in a slew of data due this week, with industrial production, fixed asset investment and retail sales all being released in the coming days.

In Korea, the Kospi finished 0.62% higher at 2,043.78, while Hong Kong’s Hang Seng Index bucked the regional trend and finished 0.13% lower at 22,465.61.

India’s central bank kept its core rate unchanged at 6.5%, and its cash reserve ratio at 4%.

The Reserve Bank of India said its monetary policy was remaining “accommodative,” with its intention to “emphasise the adequate provision” of liquidity in the market.

It was the last monetary policy statement to be released under governor Raghuram Rajan, who is leaving the post next month.

Thailand was also making headlines, as junta chief and Prime Minister Prayuth Chan-ocha reiterated his pledge to hold a general election in 2017.

The electorate voted in favour of a military-backed constitution on Sunday, in the biggest democratic test of the populace since the 2014 coup in which Prayuth seized power.

Economic growth in the country has been stunted in recent years, amid two military coups and a number of incidents of civil unrest.

Oil prices surged close to 3% overnight, though they cooled off somewhat after Asian trading, with Brent crude last down 0.15% at $45.32 per barrel and West Texas Intermediate losing 0.05% at $43.

“News that OPEC would be having a September meeting with certain members keen to push for supply cuts again served as the impetus for oil prices to rally,” said IG market analyst Angus Nicholson.

In Australia, the S&P/ASX 200 added 0.26% to 5,552.50, with the weighty financials and energy subindexes both closing almost 1% higher.

Energy players in the sunburnt country were higher off the back of crude prices, with Oil Search up 1.35%, Woodside Petroleum gaining 1.06% and Santos 1.71% higher.

General business conditions were said to be cooler in July, with the National Australia Bank survey of more than 500 companies registering a three-point decline in business conditions to +8 during the month.

Business confidence fell one point to +4.

In Australian corporate news, hearing implant manufacturer Cochlear posted net profit of AUD 188.9m for the year through June, up 30%, with the board declaring a final dividend of AUD 1.20.

New Zealand’s S&P/NZX 50 reached a fresh record high, adding 0.2% to finish a 7,363.16.

Local reports suggested sentiment was buoyant as the markets there headed into earnings season, given the lack of any significant profit warnings.

Australia and New Zealand Banking Group rose 2.8% in Wellington, after it hit a seven-month high earlier in Sydney.

The rises came after the bank said it was not expecting a “blow-out” in expenses over bad debts, which have plagued enthusiasm in the Australasian banking sector in recent months, and it also increased capital.

Both of the down under dollars were stronger against the greenback, with the Aussie advancing 0.11% to AUD 1.3056 per $1, and the Kiwi ahead by the same at NZD 1.3993.