Asia report: Most markets higher as Kospi touches record

Most markets in Asia finished positive on Thursday - some indexes touching record highs - as traders sifted through testimony from Federal Reserve chair Janet Yellen’s annual appearance in front of Congress.

The Nikkei 225 was up 0.01% at 20,099.81, as the yen strengthened against the greenback, last advancing 0.19% to JPY 112.95.

On the mainland, the Shanghai Composite was ahead 0.67% at 3,219.04, while the smaller, tech-heavy Shenzhen Composite lost 0.04% to 1,888.70.

Fresh Chinese trade data saw a small spike in both indices during the session, with exports in renminbi terms rising 15% year-on-year in the first half, while imports were 25.7% firmer.

Data released by the General Administration of Customs suggested a heavier flow of goods across the Sino-Korean Friendship Bridge too, with trade with North Korea ahead 10.5%.

The country’s monthly trade data for June also came in ahead of forecasts, with exports in dollar terms up 11.3% year-on-year and imports rising 17.2%.

Those readings compared well with a Reuters-polled estimate for an 8.7% improvement in exports and a 13.1% rise in imports.

South Korea’s Kospi added 0.74% to 2,409.49, having touched a record high of 2,422.26 earlier in the session, while the Hang Seng Index in Hong Kong reached two-year highs during the session before closing up 1.16% at 26,346.17.

Seoul’s markets were particularly buoyant after the Bank of Korea confirmed it was standing pat on interest rates, keeping the official rate at 1.25%.

Chipmaker SK Hynix was ahead 2.47%, after it reaffirmed it wanted a piece of Toshiba’s valuable memory unit in the ongoing wrangling for that asset.

SK Hynix was a part of the Japanese state-led consortium selected by Toshiba as its preferred bidder for the division, although talks over that deal had reportedly hit a speed bump, while American memory giant Western Digital was seeking to involve itself in the deal as its SanDisk division was in joint venture with Toshiba at one of its manufacturing facilities.

Tokyo-based Toshiba has been signalling its desire to offload the memory chip business for months, in a bid to shore up a cash crisis after the failure of its US nuclear acquisition Westinghouse, though progress on doing so has so far been slow and convoluted.

Toshiba shares were down 4.45% in Tokyo.

Hong Kong-listed developer of Chinese residential property Sunac was downgraded by Fitch to ‘BB-’ from ‘BB’ on Wednesday, placing the stock on ‘watch negative’ after it emerged the company was buying up assets from the Dalian Wanda conglomerate.

Sunac shares were down 1.19% at the close.

Stateside, Fed chair Janet Yellen told Congress on Wednesday that the central bank was going ahead with well-signalled plans to unwind its massive balance sheet, though it was treading carefully with how to proceed as it kept a close eye on inflation data.

Yellen said it was “premature” to say definitively whether the US economy was heading for 2% inflation.

“Investors have been skeptical of the Fed's hawkishness in the days leading up to Janet Yellen's testimony, and when she failed to sufficiently emphasise the improvements in the economy, the dollar u-turned as the bulls abandoned their trades quickly,” noted BK Asset Management managing director of FX strategy Kathy Lien.

Oil prices were in the red during Asian trading, with Brent crude last down 0.61% at $47.45 per barrel and West Texas Intermediate off 0.49% to $45.27.

Australia’s S&P/ASX 200 was ahead 1.11% at 5,736.77, with its healthcare subindex underpinning the benchmark’s gains.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was ahead 0.3% at 7,610.89, led higher by the self-listed market facilitator NZX, which was up 2.6%.

Both of the down under dollars were seriously strong against the greenback, with the Aussie last ahead 0.74% at AUD 1.2928 and the Kiwi advancing 1.04% to NZD 1.3633.