Asia report: Markets mixed amid further developments on trade and Brexit

In Japan, the Nikkei 225 was up 0.22% at 22,799.81, as the yen strengthened 0.03% against the dollar, to last trade at JPY 108.58.

Of the major components on the benchmark index, automation specialist Fanuc was up 0.02%, while fashion firm Fast Retailing was down 0.64% and technology conglomerate SoftBank Group lost 1.23%.

The broader Topix index closed up 0.29% in Tokyo, to settle the week at 1,648.44.

On the mainland, the Shanghai Composite was ahead 0.48% at 2,954.93, and the smaller, technology-heavy Shenzhen Composite was 0.99% firmer at 1,632.40.

South Korea’s Kospi was 0.11% higher at 2,087.89, while the Hang Seng Index in Hong Kong slipped 0.49% to 26,667.39.

Both of the blue-chip technology stocks were higher in Seoul, with Samsung Electronics up 0.39%, and chipmaker SK Hynix rising 3.63%.

SK Hynix shares were still enjoying the ride from its third-quarter earnings on Thursday, in which it reported a 40% fall in revenue and an 89% drop in net profit year-on-year.

Investors were latching on to the fact that revenue was up 6% quarter-on-quarter, however, which suggested the recent slump in demand for memory chips was beginning its recovery.

Samsung Electronics, meanwhile, was set to release its official earnings on 31 October, having previously flagged a fall of more than 50% for its operating profit on a year-on-year basis.

Sentiment on the trade front was muted for much of the Asian day, after US vice-president Mike Pence criticised China in a speech overnight, panning that the latter’s development of a “surveillance state”, and its “increasingly provocative” approach to its military.

Still, Pence did say that Washington was not out to “seek confrontation with China”, or “contain China’s development”.

At the same time, the US Congress voted in favour of legislation to prohibit American companies from selling munitions equipment, such as tear gas, pepper spray and rubber bullets, to authorities in Hong Kong.

“What began as an issue for Hong Kong’s right for democracy and self-determination has now spilled into the wider corporate picture, with both the NBA and Nike coming in for criticism over their censorship in the bid to maintain Chinese funding,” said IG analyst Joshua Mahoney.

“For markets this is simply another issue that could complicate or derail trade talks, with the Chinese largely combative when pressed by foreign powers on the Hong Kong issue.”

Over on the Brexit front, UK prime minister Boris Johnson said he was prepared to give MPs more time to digest his Brexit deal, so long as they agreed to support his motion for a general election on 12 December.

It came as Westminster awaited a response from Brussels as to whether the European Union was willing to grant an extension to the Brexit deadline beyond 31 October, and if so, for how long.

Oil prices were lower as the region entered the weekend, with Brent crude last down 0.18% at $61.56 per barrel, and West Texas Intermediate off 0.21% at $56.11.

In Australia, the S&P/ASX 200 managed gains of 0.68% to close its trading day at 6,739.20.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was off 0.4% at 10,788.64, with some of the country’s energy generators in the red amid ongoing consternation around the future of the aluminium smelting operation at Tiwai Point.

The plant’s majority owner, Anglo-Australian mining giant Rio Tinto, said earlier in the week that it was reviewing the future of New Zealand Aluminium Smelters given the current low-price environment for aluminium.

New Zealand Aluminium Smelters is the country’s largest single electricity customer.

On Friday, Contact Energy was down 0.3% and Meridian Energy - which owns the Manapouri Hydroelectric Dam, built specifically to supply Tiwai Point - dropped 2.8%.

The down under dollars were a mixed picture against the greenback, with the Aussie last 0.14% stronger at AUD 1.4649, while the Kiwi retreated 0.32% to NZD 1.5717.