Asia report: Most markets rebound from earlier losses

Asia-Pacific markets mostly rebounded Thursday, amid remarks from US Federal Reserve chairman Jerome Powell overnight.

Powell emphasised the need for patience in assessing inflation dynamics, adding to market uncertainty regarding the timing of potential interest rate cuts.

“Asian stock markets are mostly trading higher on Thursday, following the positive cues from global markets overnight,” said TickMill market analyst Patrick Munnelly.

“This comes as traders react to the latest remarks from US Fed officials, which have helped to alleviate concerns about the outlook for interest rates.

“Fed chair Jerome Powell reiterated during remarks at Stanford University that the central bank is not in a rush to start lowering interest rates, but he also affirmed his belief that they will probably cut interest rates this year.”

Munnelly noted that Asian markets closed mostly lower on Wednesday.

“Making up for the previous session's losses, the Japanese market is seeing a significant increase on Thursday, in line with the mostly positive trends in global markets overnight.”

Most markets rise in relatively quiet trading

In Japan, the Nikkei 225 rose 0.81% to reach 39,773.14, while the Topix index also recorded a gain of 0.94% at 2,732.00.

Leading the gainers on Tokyo’s benchmark was DeNA, soaring by 9.6%, followed by Tokyo Electric Power with a substantial increase of 9.42%, and Konica Minolta, rising by 5.89%.

Meanwhile, China and Hong Kong markets remained closed due to the Qingming Festival holiday, limiting trading activity in the region.

In South Korea, the Kospi index jumped 1.29% to 2,742.00, buoyed by impressive gains from companies such as SKC, which rose by 16.09%, LS Electric, up by 13.98%, and Hyundai Electric & Energy Systems, advancing by 7.23%.

Australia's S&P/ASX 200 index edged up by 0.45% to settle at 7,817.30, with notable performers including Arcadium Lithium, up by 6.29%, Liontown Resources rising by 5.22%, and South32 showing an increase of 4.62%.

Conversely, New Zealand's S&P/NZX 50 index experienced a slight decline of 0.04%, closing at 12,035.26.

Key decliners in Wellington included Synlait Milk, down by 8.82%, A2 Milk Company showing a decrease of 3.64%, and Serko declining by 2.91%.

In currency markets, the dollar was last up 0.03% on the yen to trade at JPY 151.75, it weakened against its antipodean counterparts.

The greenback was last down 0.58% on the Aussie at AUD 1.5144, while it retreated 0.51% against the Kiwi to change hands at NZD 1.6556.

Oil prices showed slight fluctuations, with Brent crude futures last down 0.11% on ICE at $89.25 per barrel, and the NYMEX quote for West Texas Intermediate decreasing 0.06% to $85.38.

Retail sales growth accelerates in Hong Kong

In economic news, Hong Kong’s retail sales for February showed resilience, with a year-on-year increase of 1.9%, marking an acceleration from the 0.9% gain recorded in the prior month.

In volume terms, retail sales reversed a previous decline, rising 0.5% in February after experiencing a 1.2% contraction in January.

The city’s census and statistics department highlighted the significance of analysing retail sales figures for January and February together due to the greater volatility during the Chinese New Year period.

Provisional estimates for the first two months of 2024 suggested a 1.4% increase in total retail sales compared to the same period in 2023.

Meanwhile, Japan's stance on currency intervention came under scrutiny, with Hiroshi Watanabe, Japan's former top currency diplomat, asserting that intervention in the currency market would only be considered if the yen weakened beyond JPY 155 against the dollar.

According to Reuters, Watanabe emphasised that the recent declines in the yen had remained within a broad range, unlike the sharper declines seen in 2022.

He noted that while market attention was focussed on the JPY 152 level against the greenback, Japanese authorities were unlikely to view a break above that level alone as a compelling reason for intervention.

In India, the service sector demonstrated robust expansion, outpacing expectations in March.

According to HSBC, the services purchasing managers' index (PMI) surged to 61.2, up from 60.3 in February and surpassing the 60.6 estimate in a Reuters poll.

HSBC described the growth as one of the strongest seen in more than 13-and-a-half years, attributing it to favourable demand conditions, efficiency gains, and positive sales developments.

Additionally, India's composite PMI rose from 60.6 in February to 61.8 in March, marking the second-strongest expansion in over 13.5 years.

Reporting by Josh White for Sharecast.com.