Asia report: Markets finish mixed as US-China tensions linger
Markets in Asia finished in a mixed state on Monday, as gold prices reached a new record high amid continuing tensions between the United States and China.
In Japan, the Nikkei 225 came back from a two-day break last week to close down 0.16% at 22,715.85, as the yen strengthened 0.77% against the dollar to last trade at JPY 105.32.
Technology conglomerate SoftBank Group was up 0.11%, but among the benchmark’s other major components, automation specialist Fanuc was down 0.36%, and fashion firm Fast Retailing lost 0.34%.
The broader Topix index went the other way from the Nikkei, ending its session in Tokyo up 0.24% at 1,576.69.
Japan’s central bank released its ‘Summary of Opinions’ from its July meeting during the session, saying it was expecting the country’s economy to “pick up moderately” from the second half of this year.
The Bank of Japan did say, however, that the country was “unlikely to return to the level reached before the outbreak of Covid-19” on economic terms until after the 2022 financial year.
On the mainland, the Shanghai Composite was ahead 0.26% at 3,205.23, and the smaller, technology-heavy Shenzhen Composite was 0.28% firmer at 2,144.37.
In fresh economic data out of China, the country’s industrial profits rocketed 11.5% year-on-year in June, according to the National Bureau of Statistics.
South Korea’s Kospi added 0.79% to 2,217.86, while the Hang Seng Index in Hong Kong was 0.41% weaker at 24,603.26.
The blue-chip technology stocks were a mixed affair in Seoul, with Samsung Electronics rising 2.58%, while chipmaker SK Hynix was down 1.08%.
Geopolitical tensions and coronavirus concerns saw gold prices propel to a new record during the Asian day, with spot golf prices reaching as high as $1,943.9275, according to CNBC - well ahead of the previous record set almost nine years ago.
Investors were keeping a close eye on the relationship between Washington and Beijing, after Chinese stocks plunged on Friday following an order from China’s politburo that the US vacate its consulate in Chengdu.
That was in retaliation to an unexpected order from the US for China to depart its consulate in Houston earlier in the week.
Market watchers were also looking to keep their wallets closed ahead of an expected fresh coronavirus stimulus from the US, after Treasury Secretary Steven Mnuchin said on Sunday that Republicans would present a bill worth around $1trn in relief.
“Gold soared to $1944 an ounce, a record high, as capital continued pouring into the precious metal on the back of an uncertain appetite for risk and waning trust regarding the strength and the viability of gains in global equities,” said Swissquote Bank senior analyst Ipek Ozkardeskaya.
“Low US yields remain supportive of a further attempt on the $2000 mark, even though the RSI index near 85% warns that the precious metal has been bought too fast in a too short period of time and a downside correction should be healthy at the current levels.
“There is a mounting risk of rapid profit taking and a sharp downside correction, provided the decent amount of long speculative positions in gold.”
Oil prices were lower as the region went to bed, with Brent crude last down 0.16% at $43.27 per barrel, and West Texas Intermediate off 0.36% at $41.14.
In Australia, the S&P/ASX 200 rose 0.34% to 6,044.20, while across the Tasman Sea, New Zealand’s S&P/NZX 50 was off 0.44% at 11,585.62.
Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.31% at AUD 1.4030, and the Kiwi advancing 0.41% to NZD 1.4995.