Asia report: Markets mixed as Evergrande fallout continues

Hong Kong's markets bore the brunt of the losses in the region, with other major markets showing varying degrees of resilience.

“Asian markets saw a mixed trading session with the momentum from Wall St's record highs offset by weakness in China,” said TickMill market analyst Patrick Munnelly.

“The Nikkei 225 initially rose after a surprise drop in Japan's unemployment rate, but later gave up most of its gains.

“This evening, the Bank of Japan will release a summary of this month’s policy meeting, during which interest rates were left unchanged and remain in negative territory.”

However, Munnelly noted that in comments following the meeting, the central bank’s governor Kazui Ueda seemed to suggest rates could start rising from the spring.

“Consequently, today's summary will be closely scrutinised for indications of whether this is indeed a realistic possibility.

“The Hang Seng and Shanghai Composite were under pressure as attention shifted to earnings releases, with Hong Kong experiencing losses in property and tech sectors.

“Additionally, the Hong Kong government initiated the process of passing new national security laws.”

Hong Kong leads losses in mixed day for region

In Japan, the Nikkei 225 inched up 0.11%, closing at 36,065.86, while the Topix index slipped by 0.1% to reach 2,526.93.

Leading gainers on Tokyo’s benchmark included Mitsui Engineering & Shipbuilding, rising by 5.41%, Trend Micro with a 3.59% increase, and Nitto Denko, which advanced by 3.51%.

In contrast, China's markets faced notable declines, with the Shanghai Composite falling 1.83% to 2,830.53 and the Shenzhen Component dropping 2.4% to 8,375.98.

Caihong Display Devices and Guangzhou Pearl River Industrial Development both saw substantial losses in Shanghai, falling by 10.06% and 10.05%, respectively.

Hong Kong's Hang Seng Index registered a significant decline of 2.32%, closing at 15,703.45.

Leading the losses were Hang Lung Properties with an 8.4% decrease, Shenzhou International Group with a 7.24% decline, and Semiconductor Manufacturing International Corporation, which dropped by 6.36%.

South Korea's Kospi index exhibited relative stability with a marginal decrease of 0.07%, ending the day at 2,498.81.

Notable decliners in Seoul included Hyundai Steel, which fell by 4.2%, and KakaoPay, experiencing a 3.83% dip.

Australia's S&P/ASX 200 bucked the regional trend with a 0.29% gain, reaching 7,600.20, led higher by Megaport, which surged 27.61%, and Nickel Industries, which recorded a substantial 20.83% increase.

New Zealand's S&P/NZX 50 showed minimal movement, edging up by 0.02% to 11,914.40.

Vista Group International led the gainers in Wellington with a 5.81% rise, followed by Stride Property, which increased by 3.65%.

In currency markets, the dollar was last down 0.15% on the yen, trading at JPY 147.28, while it gained 0.15% against the Aussie to AUD 1.5148.

The greenback remained relatively stable on the Kiwi, registering a minor 0.02% gain to last change hands at NZD 1.6308.

On the oil front, Brent crude futures were last up 0.16% on ICE at $82.53 per barrel, while the NYMEX quote for West Texas Intermediate rose 0.25% to $76.97.

Unemployment sees modest decline in Japan

In economic news, Japan's unemployment rate saw a modest decline in December, according to fresh official data.

The latest figures showed the jobless rate falling to 2.4% from the prior month, following a reading of 2.5% in October.

December's jobless rate not only surpassed expectations but also marked the lowest level of unemployment since January last year.

Another important indicator, the jobs-to-applicants ratio, recorded notable progress, standing at 1.27 in December to reach a level not seen since June 2022.

The figure was slightly below the Reuters-polled forecast of 1.28.

Reporting by Josh White for Sharecast.com.