Asia report: Most markets rise as PBOC keeps interest rates steady

Most markets in Asia finished in the green on Monday, as China’s central bank kept its one and five-year loan prime rates on hold for the month.

In Japan, the Nikkei 225 was up 0.18% at 24,083.51, as the yen weakened 0.03% to JPY 110.17.

Of the major components on the benchmark index, automation specialist Fanuc was up 0.77%, but Uniqlo owner Fast Retailing lost 1.58% and technology giant SoftBank Group slipped 0.31%.

The broader Topix index was also in positive territory at the end of trading in Tokyo, rising 0.5% to 1,744.16.

On the mainland, the Shanghai Composite was ahead 0.66% at 3,095.79, and the smaller, technology-heavy Shenzhen Composite rose 1.31% to 1,829.95.

Pharmaceutical companies and health device makers were in positive territory in China, as concerns over a coronavirus outbreak were raised.

Drugmakers Jiangsu Sihuan Bioengineering and Shandong Lukang Pharmaceutical, and face mask manufacturer Shanghai Dragon, all saw their shares rise by around their daily movement limits of 10%.

The People’s Bank of China stood pat on its one and five-year loan prime rates for the month of January, with market watchers putting that down to the central bank taking a ‘wait and see’ approach to the economy following the signing of a phase one trade deal with the United States last week.

South Korea’s Kospi was 0.54% firmer at 2,262.64, while the Hang Seng Index in Hong Kong slipped 0.9% to 28,795.91.

Both of the blue-chip technology stocks were higher in Seoul, with Samsung Electronics up 1.79% and chipmaker SK Hynix adding 0.91%.

Oil prices were higher as the region logged off, with Brent crude last up 0.43% at $65.13 per barrel, and West Texas Intermediate ahead 0.32% at $58.77.

“Oil took off amid supply disruption in Libya and Iraq - production of 1.2m barrels per day has been completely crippled after forces loyal to Khalifa Haftar closed a pipeline,” said Neil Wilson, chief market analyst at Markets.com.

“About 800,000 barrels per day of that figure has been taken out, although it could be higher.”

Wilson noted that was coinciding with disruptions to production in Iraq.

“We can expect both countries to provide ongoing supply uncertainty but these are relatively mild and likely to be shorter duration outages.

“I don’t think we are seeing a major disruption - certainly any spare capacity can simply be absorbed by other OPEC members gladly pumping a little more to compensate.

“And the global oil market just isn’t as exposed to shocks as it once was.”

In Australia, the S&P/ASX 200 was up 0.22% by end-of-play, settling at 7,079.50.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 went the other way, falling 0.45% to 11,746.95, as software maker Gentrack sank 13.6%.

The company issued a profit warning earlier in the session, telling shareholders that its annual earnings would fall by as much as two thirds thanks to a tightening of regulation in the UK energy market, and in Australia.

Both of the down under dollars were weaker on the greenback, with the Aussie last off 0.12% at AUD 1.4564, and the Kiwi retreating 0.04% to NZD 1.5133.