Asia report: Most markets weaker on quiet trading day

Most markets in Asia closed weaker on Wednesday, with Australia’s main board sliding almost 2%, on a relatively quiet day in the region.

In Japan, the Nikkei 225 was down 1.28% at 28,044.45, as the yen weakened 0.28% against the dollar to last trade at JPY 109.21.

Of the major components on the benchmark index, automation specialist Fanuc was down 0.97%, fashion firm Fast Retailing lost 3.13%, and SoftBank Group lost 2.05%.

The broader Topix index was 0.66% weaker by the end of trading in Tokyo, settling at 1,895.24.

On the mainland, the Shanghai Composite was off 0.51% at 3,510.96, while the smaller, technology-heavy Shenzhen Composite managed gains of 0.14% to 2,327.46.

South Korea’s markets were closed for the Buddha’s Birthday holiday, as were those in the Hong Kong special administrative region.

Oil prices were lower at the end of the Asian day, with Brent crude last down 1.95% at $67.37 per barrel, and West Texas Intermediate off 2.2% at $64.05.

In Australia, the S&P/ASX 200 was 1.9% lower by the close in Sydney, as the hefty financials subindex lost 1.81%.

The big four banks were all weaker in the sunburnt country, with Australia and New Zealand Banking Group down 1.41%, Commonwealth Bank of Australia off 2.5%, National Australia Bank falling 1.33%, and Westpac Banking Corporation closing 1.1% lower.

In fresh data out of Canberra, the country’s wage cost index printed marginally above market expectations for the first quarter, with wages growing 0.6% quarter-on-quarter and 1.5% year-on-year, against consensus forecasts for 0.5% and 1.4%, respectively.

“The stronger-than-expected economic recovery has boosted business hiring intentions, with NAB's survey of employment intentions over the next three and 12 months ahead at multi-year highs,” said TD Securities senior Asia-Pacific rates strategist Prashant Newnaha.

“Coupled with the stronger hiring intentions and the robust increase in job ads in recent months, the outlook for the labour market is positive.”

Newnaha said that in recent months, there had been a sharp drop in the underutilisation rate, which pointed to a high likelihood that annual wages growth had now likely bottomed.

“A further drop in the underutilisation rate, as the forward looking indicators suggest, means that the risks to wages are to the upside, but whether annual wages can grow at 3% over the forecast horizon remains up in the air.

“The Reserve Bank and Treasury forecasts don’t expect this to be the case.”

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was off 1.18%, closing at 12,281.50, as travel software company Serko slid 6.7%.

The company reported a loss of NZD 29.4m, which was in line with market expectations, though it declined to give any earnings guidance for the 2022 financial year.

Both of the down under dollars were weaker against the greenback, with the Aussie last off 0.51% at AUD 1.2903, and the Kiwi retreating 0.63% at NZD 1.3902.