Asia report: Stocks mixed as Beijing eases Covid rules, RBA hikes rates

Stock markets were mixed in the Asia-Pacific region on Tuesday, as Beijing announced further easing of some Covid-19 restrictions, and after Australia’s central bank hiked interest rates as expected.

In Japan, the Nikkei 225 was up 0.24% at 27,885.87, as the yen strengthened 0.45% on the dollar to last trade at JPY 136.13.

Tech investing giant SoftBank Group was down 2.49%, while robotics specialist Fanuc was up 1.1% and Uniqlo owner Fast Retailing 2.04% higher.

The broader Topix index was 0.12% firmer by the end of trading in Tokyo, settling at 1,950.22.

On the mainland, the Shanghai Composite managed gains of 0.02% to 3,212.53, and the technology-centric Shenzhen Component was 0.67% firmer at 11,398.82.

Authorities in China’s capital city Beijing announced a relaxation in restrictions on Tuesday, with negative Covid-19 tests no longer needed to enter most public spaces.

It came after sentiment around China was boosted on Monday by reports that the politburo was preparing to announce a relaxation of the controversial pandemic rules as soon as Wednesday.

South Korea’s Kospi slid 1.08% to 2,393.16, while the Hang Seng Index in Hong Kong was 0.4% lower at 19,441.18.

Seoul’s blue-chip technology stocks were mixed, with Samsung Electronics down 1.82% and SK Hynix closing flat.

Oil prices were lower as the region went to bed, with Brent crude futures last down 1.31% on ICE at $81.60 per barrel, and the NYMEX quote for West Texas Intermediate falling 1.26% to $75.96.

In Australia, the S&P/ASX 200 slipped 0.47% to 7,291.30, after the Reserve Bank of Australia sated market expectations with a 25-basis point rate hike, taking its cash rate to 3.1%.

It was the third 25-basis point hike in a row from the RBA, and the eighth increase in interest rates in 2022, as inflation in Australia at 6.9% in October remained well above the RBA’s target range of 2% to 3%.

After the announcement, RBA governor Philip Lowe said in his statement that the central bank expected to continue raising rates, although it was “not on a pre-set course”.

“The board recognises that monetary policy operates with a lag and that the full effect of the increase in interest rates is yet to be felt in mortgage payments,” Lowe’s statement read.

“Household spending is expected to slow over the period ahead although the timing and extent of this slowdown is uncertain.”

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was 0.4% lower at 11,631.60, as Property for Industry lost 1.7% after it sold two properties for almost double their purchase price 10 years ago.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.52% at AUD 1.4852, and the Kiwi advancing 0.42% to NZD 1.5765.

Reporting by Josh White for Sharecast.com.