Asia report: Markets close lower as oil prices surge

In Japan, the Nikkei 225 was down 2.8% at 27,467.23, as the yen strengthened 0.08% on the dollar to last trade at JPY 114.52.

Of the major components on the benchmark index, automation specialist Fanuc was down 2.35%, fashion firm Fast Retailing slipped 0.23%, and technology conglomerate SoftBank Group was off 1.74%.

Electronics and entertainment conglomerate Sony plunged 12.79%, after Microsoft agreed to buy video games publisher Activision Blizzard in a $69bn deal overnight.

It would be the largest US technology deal in history, and would likely give Microsoft’s Xbox gaming platform an edge over Sony’s PlayStation given many of Activision’s intellectual properties would become exclusive to Xbox.

Microsoft has been willing to splash cash in a bid to dominate the video games sector in recent years, having purchased developer Bethesda Softworks for $7.5bn in 2021.

The broader Topix was 2.97% lower by the end of trading in Tokyo, closing at 1,919.72.

On the mainland, the Shanghai Composite slipped 0.33% at 3,558.18, as the smaller, technology-heavy Shenzhen Composite was 0.92% lower at 2,442.12.

South Korea’s Kospi was down 0.77% at 2,842.28, while the Hang Seng Index in Hong Kong was the region’s odd one out, eking out gains of 0.06% to close at 24,127.85.

Floundering cruise operator Genting Hong Kong had its shares suspended in the special administrative region, as it told shareholders it was preparing for a managed sinking of the company.

The firm said it had filed a winding-up petition, as it had not been able to get the funds needed to remain solvent, leading to an application for provisional liquidators to be appointed.

Genting said its current cash was likely to run out by the end of the month, and had warned earlier in January that it could be unable to meet its financial obligations after its Germany-based shipbuilding operation MV Werften filed for insolvency.

The blue-chip technology stocks were mixed in Seoul, with Samsung Electronics down 0.91%, while SK Hynix rose 0.4%.

Sentiment was dented by a sell-off stateside overnight, after Goldman Sachs missed Wall Street expectations on earnings, leading to a sell-off for the bank.

“The S&P 500 closed below the low of last week and just about held its 100-day moving average, whilst the Dow closed below that level,” said Neil Wilson at Markets.com.

“The Nasdaq Composite dropped below its 200-day line for the first time since April 2020.”

Wilson noted that the Nasdaq 100 was not quite at the lows seen last Monday, although futures on Wednesday suggested it would open lower.

“The wreck in tech is not an orderly rotation right now, particularly with banks being sold off from elevated levels.”

Oil prices continued to advance at the end of the Asian day, with Brent crude last up 1.18% at $88.54 per barrel, and West Texas Intermediate rising 1.59% to $86.79.

In Australia, the S&P/ASX 200 was off 1.03% at 7,332.50, with Sydney’s bourse dragged lower by the hefty financials subindex, which lost 1.35%.

The so-called ‘big four’ banks were all weaker, with Australia and New Zealand Banking Group down 0.66%, Commonwealth Bank of Australia off 1.45%, National Australia Bank losing 1.16%, and Westpac Banking Corporation 0.79% weaker.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 lost 1.58% to close at 12,612.31, after the chief economist at major bank ANZ New Zealand warned that the country’s official cash rate was likely to hit 3% by April next year.

The Reserve Bank of New Zealand became the first central bank of a G10 currency off the rate-hiking blocks in October, and again in November, adding 25 basis points to its official rate in both months to the current 0.75%.

Wellington-traded shares of the big Australasian banks were weaker, with ANZ down 1.12% and Westpac off 1.71%, while local banking firm Heartland Group was 1.93% weaker.

The down under dollars were both stronger on the greenback, with the Aussie last ahead 0.37% at AUD 1.3867, and the Kiwi advancing 0.35% to NZD 1.4720.