Asia report: Most markets lower on mixed day for Kiwi milk industry

Markets in Asia finished mixed on Wednesday, with investor attention very much turned across the Pacific Ocean to the Federal Reserve ahead of the outcome of its March policy meeting.

In Japan, markets were closed for the vernal equinox holiday, as the yen strengthened 0.29% against the dollar to last trade at JPY 106.22.

On the mainland, the Shanghai Composite lost 0.27% to 3,281.59, and the smaller, technology-heavy Shenzhen Composite slid 0.73% to 1,858.61.

South Korea’s Kospi slipped just 0.02% to settle at 2,484.97, while the Hang Seng Index in Hong Kong ended the session down 0.43% at 31,414.52.

The big shipbuilders were mixed on the Korean peninsula, with Hyundai Heavy Industries managing to add 3.75%, while carmakers and technology plays also ended the day on a mixed note.

Traders were keeping an eye on the US, with the Fed widely expected to make its first interest rates hike of the year later in the global day.

The CME Group’s FedWatch tool had the probability of a 25 basis point rise above 94% during the Asian session.

“Expectations are skewed towards a more upbeat outlook for growth, employment and possibly inflation, whilst there has been a rise in market opinion that the FOMC may raise rates four times this year,” noted analysts at ANZ Research.

“We do not expect the Fed to shift its outlook aggressively.”

Oil prices continued to rise as the region went to bed, with Brent crude last up 1.1% at $68.17 per barrel and West Texas Intermediate ahead 0.91% at $64.12.

In Australia, the S&P/ASX 200 was ahead 0.23% at 5,950.30 by end-of-play, with the energy subindex rising 1.17% on the back of solid gains in oil prices overnight.

The telecommunications and utilities sectors were on the back foot in Sydney, however.

James Packer stepped down as a director of Crown Resorts, citing personal reasons, leading to a 0.92% decline in the company’s shares.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 rose 1.4% to 8,608.29, led higher by infant food and dairy products exporter Synlait Milk, which was ahead 14%.

Synlait posted a record first-half net profit, pointing to manufacturing increases and a rise in sales of high-margin products for the exponential growth.

The global dairy industry was affected by the news that the world’s largest dairy exporter, New Zealand cooperative Fonterra, would see its CEO Theo Spierings stepping down later in the year.

Spierings had led the milk behemoth through a number of events, including a botulism contamination scare and the establishment of a shareholders’ fund so that non-members could hold economic rights in the farmers’ cooperative.

Fonterra also announced a net loss for the six months to 31 January earlier in the session.

The down under dollars were mixed, with the Aussie last 0.01% stronger on the greenback at AUD 1.3015, with the Kiwi retreating 0.34% to NZD 1.3968.