Asia report: Most markets lower, HSBC shares soar in Hong Kong

Markets in Asia closed mostly lower on Tuesday, with HSBC being the standout exception, as its shares rocketed on Hong Kong on the back of an earnings beat.

In Japan, the Nikkei 225 was down 0.04% at 23,485.80, as the yen strengthened 0.16% against the dollar to last trade at JPY 104.67.

Technology giant SoftBank Group rose 0.33%, while among the benchmark’s other major components, robotics specialist Fanuc was down 0.7% and Uniqlo owner Fast Retailing was off 0.03%.

The broader Topix index lost 0.09% to end the trading session in Tokyo at 1,617.53.

On the mainland, the Shanghai Composite gained 0.1% at 3,254.32, and the smaller, technology-centric Shenzhen Composite was 0.54% firmer at 2,223.92.

In fresh data out of Beijing, profits at industrial companies in China leapt 10.1% year-on-year in September.

South Korea’s Kospi was 0.56% weaker at 2,330.84, while the Hang Seng Index in Hong Kong slid 0.53% to 24,787.19.

Anglo-Asian bank HSBC soared 4.81% by the close in the special administrative region, after it reported a higher-than-expected pre-tax profit for the third quarter.

The bank reported a 36% slide in profit before tax to $3.1bn, mainly from lower revenue, which declined 11% to $11.9bn.

“Asia was the sole source of positive income as it reported profit before tax of $3.2bn in the third quarter, despite interest rate headwinds,” noted Markets.com chief market analyst Neil Wilson.

“It underlines the fact HSBC’s exposure and reliance on Greater China has been a positive this year in the wake of the pandemic and the economic recovery in that region being swifter than in Europe [and the] US.

“Cuts to interest rates by central banks left net interest margin at 1.20%, which was down 36 basis points from the third quarter of 2019.”

Alibaba Group was 0.67% higher in Hong Kong, after its affiliate Ant Group confirmed pricing for its upcoming initial public offering in Shanghai and Hong Kong - expected to be the biggest ever listing.

The blue-chip technology stocks were both weaker in Seoul, with Samsung Electronics down 0.99% and chipmaker SK Hynix off 0.72%.

Gross domestic product was ahead 1.9% quarter-on-quarter for the third quarter in South Korea, according to an estimate from the Bank of Korea released during the day.

Oil prices were higher as the region went to bed, with Brent crude last up 1.24% at $40.96 per barrel, and West Texas Intermediate rising 1.35% to $39.08.

The prospect of coronavirus stimulus in the US also remained at the top of the agenda for traders, one week out from the presidential election.

“Traders know stimulus is coming, but they are struggling to find the optimal Covid-19 overwrites while factoring in US election risk and a crowded stay at home basket ahead of what is bound to be a special Thursday US earnings session with a quorum of heavily subscribed tech sector leaders earnings on display,” said Axi chief global market strategist Stephen Innes.

“Despite a convincing lead for Biden, people are still worried about the ‘shy Trump voter.’”

Innes said it was unlikely pollsters had not thought of that, and corrected for it.

“Honestly, I believe it is sensible to assume a much higher probability they have overcorrected for it and almost no chance they have under-corrected for it.”

In Australia, the S&P/ASX 200 dropped 1.7% to 6,051.00, while across the Tasman Sea, New Zealand’s S&P/NZX 50 was 1.75% weaker at 12,251.91.

The down under dollars were both stronger on the greenback, with the Aussie managing gains of 0.01% to AUD 1.4037, and the Kiwi advancing 0.17% to NZD 1.4949.