Asia report: Markets mostly higher after surge on Wall Street

In Japan, the Nikkei 225 was down 0.38% at 23,091.03, as the yen strengthened 0.46% against the dollar to last trade at JPY 107.93.

Of the major components on the benchmark index, automation specialist Fanuc was up 0.6%, Uniqlo owner Fast Retailing added 1.32%, and technology giant SoftBank Group was 0.64% firmer.

The broader Topix index was 0.14% weaker by the end of trading in Tokyo, settling at 1,628.43.

On the mainland, the Shanghai Composite was up 0.62% at 2,956.11, and the smaller, technology-centric Shenzhen Composite was 0.67% firmer at 1,869.33.

South Korea’s Kospi managed gains of 0.21% to 2,188.92, while the Hang Seng Index in Hong Kong was 1.13% higher at 25,057.22.

The blue-chip technology stocks were mixed in Seoul, as chipmaker SK Hynix lost 1.32%, while Samsung Electronics rose 1.09%.

Other companies in the Samsung chaebol were mixed, with Samsung Biologics also on the front foot by 1.81%, while Samsung C&T lost 0.88%.

The moves in the conglomerate’s components came after a court in Seoul denied an arrest warrant for its chief Jay Lee, who remains under investigation for his role in the merger of two affiliates in 2015.

He was jailed in 2017 after being found guilty of a number of charges, including bribery and embezzlement, but was released in early 2018.

Trading in Hong Kong-based long haul airline Cathay Pacific, meanwhile, was halted earlier in the session, after it was revealed that authorities in the special administrative region would give it a lending and equity-based bailout worth HKD 30bn.

Sentiment was relatively rosy throughout the region on Tuesday, after a rally on Wall Street overnight saw the S&P 500 erase its losses for the year-to-date and break above the waterline for 2020 so far.

Stock markets globally have been turning positive in recent weeks amid ongoing investor hope around the gradual reopening of economies in the wake of Covid-19 pandemic peaks, and a resulting recovery.

The World Bank threw some cold water on the fire earlier in the week, however, saying it was expecting the global economy to shrink by 5.2% this year, making for the worst recession since the wartime ravages of the 1940s.

“US stock markets look to have turned into ‘FOMO’ [fear of missing out] mode now,” said London Capital Group analyst Jasper Lawler, adding that investors and money managers who missed the rebound were scrambling to get in on the action.

“Some of the riskiest shares like airlines are now outperforming under the ‘reopening trade’.

“Boeing was top riser on the Dow, [and] at the same time some of the ‘coronavirus trades’ like Netflix are underperforming.

“With thousands returning to work in hard-hit places like New York City, investors are looking to the other side of the pandemic.”

Oil prices were lower at the end of the Asian day, with Brent crude last down 1.47% at $40.20 per barrel, and West Texas Intermediate off 2.12% at $37.38.

In Australia, the S&P/ASX 200 jumped 2.44% to close at 6,144.90, as the hefty financials subindex rallied more than 4.8%.

Among the country’s big four banks, Australia and New Zealand Banking Group was up 6.22%, Commonwealth Bank of Australia added 5.05%, National Australia Bank rose 5.08%, and Westpac Banking Corporation was 5.8% firmer.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 reversed earlier gains to close down 1.96% at 11,298.69.

It was led lower by medical device maker Fisher & Paykel Healthcare, which lost 5.7%, while specialist dairy exporter A2 Milk was off 4%.

Exporting firms in particular were hurting in the island nation, as a strong NZ dollar versus its US counterpart affected the value of their products in local currency terms.

Both of the down under dollars were weaker against the greenback on the day, however, with the Aussie last off 1.57% at AUD 1.4466, and the Kiwi retreating 1.2% to NZD 1.5426.