Asia report: Markets decline as oil prices, Korea remain in focus

The Nikkei 225 finished down 0.55% at 22,358.43, as the yen strengthened 0.44% against the dollar to last trade at JPY 108.94.

A stronger yen put pressure on the country’s major exporters, with electronics plays and steel producers feeling the pinch.

The broader Topix index was 0.48% below the line at closing time in Tokyo.

Japan Display fell 7.97% after a report out of South Korea suggested US technology behemoth Apple was set to use organic light-emitting diode (OLED) screens for its next iteration of iPhone devices.

On the mainland, the Shanghai Composite was off 0.47% at 3,120.47, and the smaller, technology-heavy Shenzhen Composite slid 1.07% to 1,786.71.

South Korea’s Kospi was 0.88% lower at 2,457.25, while the Hang Seng Index in Hong Kong lost 1% to 30,484.58.

Technology stocks were in the green in Seoul, but they failed to offset losses seen largely among banks and manufacturing plays.

LG Display was ahead 5.23% as a result of the same Apple-related reports that sent Japan Display tumbling.

Oil prices staged a recovery as Asian markets closed, having spent much of the early part of the week in the red, with Brent crude last up 0.58% at $75.74 per barrel, and West Texas Intermediate adding 0.57% to $66.90.

Other than the oil price, investor attention was also on the Italian political situation given both UK and US markets were closed for public holidays on Monday.

Calls from the populist Five Star Movement for the impeachment of Italian president Sergio Mattarella came after Mattarella vetoed parliament’s selected economic minister.

The president also appointed an ex-IMF economist to the post of interim prime minister on Monday, with snap elections seen by many as imminent.

“Focus will continue to remain on the various geopolitical themes dominating market moves as we return to full liquidity conditions,” noted Rakuten Securities Australia chief operating officer Nick Twidale, referring to the thin assortment of economic releases on offer on Tuesday.

Developments were also seen on the Korean peninsula, with representatives from Pyongyang and Washington meeting on Sunday, despite US president Donald Trump cancelling a planned summing with Kim Jong-un last week.

The US has prepared a raft of sanctions on North Korea which could be revealed soon, although reports over the weekend suggested Washington was prepared to postpone those as the two countries tried to revive the talks.

In Australia, the S&P/ASX 200 managed gains of 0.16% to settle at 6,013.60, led higher by the hefty financials subindex and the country’s major banks.

Energy firms pared some of Monday’s losses even as oil prices remained weaker, with Woodside Petroleum ahead 0.32% in Sydney trading.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 slipped 0.1% to 8,635.86, led lower by specialise dairy exporter A2 Milk, which shed 2%.

The down under dollars were both 0.28% weaker on the greenback, with the Aussie last sitting at AUD 1.3289 and the Kiwi retreating to NZD 1.4444.