Asia report: Stocks mixed as China maintains key lending rates

Asia-Pacific markets experienced a mixed performance on Thursday following China's decision to keep its benchmark lending rates unchanged.

China's central bank maintained its one-year loan prime rate at 3.45% and its five-year rate at 3.95%.

“Asian stocks weakened as investors weighed the sustainability of the recent surge in technology, which had driven a major benchmark to over two-year highs,” said TickMill market analyst Patrick Munnelly.

“The weakest regional equities were Chinese and Japanese markets.”

Munnelly noted that the Hang Seng Tech Index fell over 1%, reflecting weakness in the region's technology stocks.

“The People's Bank of China's setting of the yuan's daily reference rate was the weakest since November, suggesting a potential relaxation of monetary policy.”

Most markets lower on mixed day for region

In Japan, the Nikkei 225 edged up by 0.16% to close at 38,633.02, supported by gains in tech stocks such as Advantest, which rose 3.73%, and CyberAgent, which increased by 3.05%.

However, the broader Topix index dipped slightly by 0.11% to 2,725.54.

Chinese markets saw more significant declines, with the Shanghai Composite falling by 0.42% to 3,005.44 and the Shenzhen Component dropping 1.63% to 9,068.85.

Major losers in Shanghai included Shanghai Lingyun Industries Development, which plunged 10.18%, and Wuhan Yangtze Communication Industry Group, down 10%.

Hong Kong's Hang Seng Index declined by 0.52% to 18,335.32, weighed down by significant losses in Haidilao International, which fell 6%, Longfor Properties, down 5.49%, and Sino Biopharmaceutical, which decreased by 5.28%.

South Korea's Kospi index, however, bucked the trend, rising by 0.37% to 2,807.63.

The increase in Seoul was led by the likes of SK Innovation, which surged 15.57%, Kogas, up 13.8%, and Lotte Chemical, which rose 7.3%.

Australia's S&P/ASX 200 index remained almost flat, down by just 0.004% to 7,769.40.

Key decliners included Red 5, which dropped 7.87%, IDP Education, down 4.88%, and Cochlear, which fell 4.76%.

In contrast, New Zealand's S&P/NZX 50 index rose by 0.86% to 11,771.81, bolstered by gains in Genesis Energy, up 3.37%, Ryman Healthcare, which increased by 3.31%, and NZX, rising 2.86%.

The positive performance aligns with New Zealand's recent economic data, showing a 0.2% quarter-on-quarter growth in the first quarter, exceeding expectations.

In currency markets, the dollar was last up 0.22% on the yen to last trade at JPY 158.43, while it was unchanged against the Aussie at AUD 1.4985, and edged up 0.04% on the Kiwi to change hands at 1.6311.

Oil prices saw slight increases, with Brent crude futures last up 0.22% on ICE at $85.26 per barrel, and the NYMEX quote for West Texas Intermediate inching up 0.04% to $81.60.

China stands pat on lending rates, NZ exits technical recession

In economic news, China maintained its benchmark lending rates in June, meeting market expectations.

The one-year loan prime rate (LPR) remained at 3.45%, and the five-year LPR was held at 3.95%.

In a Reuters survey, 70% of participants anticipated such a decision.

Despite government efforts to address oversupply and support debt-laden developers, China's new house prices dropped at the fastest rate in over nine years in May, according to data released earlier in the week.

Additionally, new bank lending in May rebounded less than expected, and key money supply indicators reached record lows, indicating ongoing economic challenges in the world's second-largest economy.

Elsewhere, New Zealand's economy emerged from a technical recession, driven by growth in service industries and energy production.

Statistics New Zealand reported a 0.2% increase in gross domestic product (GDP) for the first quarter, surpassing economists' expectations.

The annual growth rate was 0.3%.

Key contributors included rental, hiring, real estate services, and electricity generation, with a minor boost from retail.

However, declines were noted in construction, business services, and manufacturing, partially offset by increased dairy exports.

Despite the overall economic growth, per capita GDP fell by 0.3% for the quarter and 2.4% annually due to population growth, marking the sixth consecutive quarterly decline in individual economic share.

Reporting by Josh White for Sharecast.com.