Asia report: Stocks fall on trade confusion, RBNZ stands pat

Markets in Asia finished lower across the board on Wednesday, led into the red by Hong Kong as protests their continued to drag on sentiment, while central bank officials in New Zealand kept interest rates on hold.

In Japan, the Nikkei 225 was down 0.85% at 23,319.87, as the yen strengthened 0.08% against the dollar to last trade at JPY 108.92.

SoftBank Group finished the day up 0.07%, while the benchmark index’s other major components were in the red, with Fanuc down 0.61% and Uniqlo owner Fast Retailing falling 1.83%.

Carmaker Nissan pared back some losses from an earlier plunge to finish down 0.5%, after it reported a 70% fall in second quarter operating income year-on-year.

Tokyo’s broader Topix index was 0.55% lower by the end of the session, to finish at 1,700.33.

On the mainland, the Shanghai Composite lost 0.33% to close at 2,905.24, and the technology-soaked Shenzhen Composite was broadly flat, eking out gains of 0.01% to settle at 1,614.30.

South Korea’s Kospi slid 0.86% to settle at 2,122,45, while the Hang Seng Index in Hong Kong tumbled 1.82% to end its trading day at 26,571.46.

Life insurance giant AIA was among the leading losers in the special administrative region, falling 3.24%.

The losses in Hong Kong came after the city’s controversial leader Carrie Lam said protestors were “paralysing” the city, almost six months after the unrest began.

Pro-democracy demonstrators clashed with police in a new round of gruesome violence on Monday, after one protestor was shot and another was apparently set alight.

The blue-chip technology stocks painted a mixed picture in Seoul, with chipmaker SK Hynix up 0.24%, while industry behemoth Samsung Electronics slipped 0.19%.

Investors were left grasping for direction on the US-China trade front during the Asian session, after a much-anticipated speech from US president Donald Trump did little to provide clarity on the situation.

In his speech at the Economic Club of New York overnight, Trump said a trade deal with China could happen "soon" but provided no new details on negotiations between the two countries.

He also threatened to raise tariffs on China "very substantially" if it did not make a deal with the US.

“Donald Trump’s speech on Tuesday failed to give investors the information they wanted on trade policy,” said Russ Mould, investment director at AJ Bell.

“Investors had hoped they would get some clarity on the potential rollback of tariffs.

"Disappointment on this front, together with heightened tensions in Hong Kong, has served to damped investor appetite for equities.”

Oil prices were lower at the end of Asian trading, with Brent crude last down 1.09% at $61.39 per barrel, and West Texas Intermediate off 0.8% at $56.35.

In Australia, the S&P/ASX 200 lost 0.81% by the end of trading, closing at 6,698.40, as the hefty financials subindex was 1.21% weaker.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was down 0.8% at 10,835.43, after the country’s central bank surprised much of the market by standing pat on interest rates.

The Reserve Bank of New Zealand kept its official cash rate at a record low 1%, with its official statement explaining that recent economic changes “do not warrant a change to the already stimulatory monetary setting at this time”.

Local analysts suggested market watchers were split on whether rates would be cut this time around, with many anticipating such a move in the hope that it would make many of Wellington’s more reliable dividend payers an even more enticing prospect.

The down under dollars were a mixed bag on the greenback, with the Aussie last 0.18% weaker at AUD 1.4645, while the Kiwi strengthened 0.94% to NZD 1.5647.