Asia report: Markets mixed as HSBC earnings top estimates

In Japan, the Nikkei 225 was down 0.71% at 28,600.41, as the yen weakened 0.08% against the dollar to last trade at JPY 113.59.

It was a negative day for the benchmark’s major components, with automation specialist Fanuc down 0.57%, fashion firm Fast Retailing sliding 3.82%, and technology conglomerate SoftBank Group 3.37% weaker.

The broader Topix index was off 0.34% by the end of trading in Tokyo, settling at 1,995.42.

On the mainland, the Shanghai Composite was ahead 0.76% at 3,609.86, and the smaller, technology-heavy Shenzhen Composite was up 0.85% at 2,433.22.

South Korea’s Kospi was up 0.48% at 3,020.54, while the Hang Seng Index in Hong Kong eked out gains of 0.02% to 26,132.03.

Shares in Anglo-Asian banking giant HSBC were up 0.43% in the special administrative region, after it reported a third quarter pre-tax profit of $5.4bn, above expectations.

The bank did not declare a dividend for the period, but it did say it was planning to launch a $2bn share buyback in the short-term.

“While we retain a cautious outlook on the external risk environment, we believe that the lows of recent quarters are behind us,” said group chief executive Noel Quinn.

Richard Hunter, head of markets at Interactive Investor, noted that less positively, the return on tangible equity number was shy of the bank’s 10% target at 8.7%, while lending balances were down by $20bn and adjusted revenues also dipped by 1%, partly due to a lower contribution from HSBC’s markets and securities services unit.

“The strategic move away from retail operations in the US and France towards further Asian focus is generally seen as a positive move, although the ongoing fractious relationship between the US and China and slowing growth in the region are areas of general concern,” Hunter said.

“Even so, HSBC has indicated that it has weathered the storm and that the worst is behind it. “The bank’s sprawling size and diversification can hamper growth, while still bringing comfort in more difficult times, and with prospects currently brightening the market consensus has recently improved to a buy.”

Floundering property development firm China Evergrande, meanwhile, was down 0.74% by the close, having rocketed more than 5% earlier in the session.

The company said in an announcement on Sunday that it had resumed work on at least 10 projects, after saying last week that it was in a position to meet debt deadlines on its bonds, having missed several such payments in recent weeks.

Seoul’s blue-chip technology stocks were mixed, with Samsung Electronics down 0.28%, and SK Hynix rising 1.52%.

Oil prices were higher at the end of the Asian day, with Brent crude last up 0.95% at $86.34 per barrel, and West Texas Intermediate rising 1.04% to $84.63.

In Australia, the S&P/ASX 200 gained 0.34% to 7,441.00, while across the Tasman Sea, New Zealand’s S&P/NZX 50 lost 0.25% to 13,093.24.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.39% at AUD 1.3339, and the Kiwi advancing 0.09% to NZD 1.3975.