Asia report: Most markets close higher; RBA holds interest rates
Most markets in Asia finished in the green on Tuesday, with bourses in mainland China staging a partial recovery from Monday’s losses, even as Hong Kong reported its first death from the ongoing outbreak of coronavirus.
In Japan, the Nikkei 225 was up 0.49% at 23,084.59, as the yen weakened 0.34% against the dollar to last trade at JPY 109.06.
Automation specialist Fanuc was down 1.35%, while some of the benchmark’s other major components were positive, with Uniqlo owner Fast Retailing up 0.28% and technology giant SoftBank Group ahead 0.33%.
The broader Topix index was 0.69% firmer by the close of trading in Tokyo, finishing the day at 1,684.24.
On the mainland, the Shanghai Composite was up 1.34% at 2,783.29, and the smaller, technology-focussed Shenzhen Composite grew 1.8% to 1,638.02.
Chinese markets had plunged more than 7% on Monday, as investors had their first chance to react to the coronavirus emergency after the extended Lunar New Year holiday.
South Korea’s Kospi was up 1.84% at 2,157.90, while the Hang Seng Index in Hong Kong added 1.21% to 26,675.98.
Authorities in the special administrative region confirmed the first death related to the Wuhan strain of coronavirus in the morning - a 39-year-old male.
“China rallied overnight to pare back a little of Monday’s collapse as we saw a broad return to risk-on across Asia as fears of the coronavirus sweeping the region eased back a touch and investors hunted on the bargain shelf,” said Neil Wilson, chief market analyst at Markets.com.
“Support from the PBOC is helping stabilise things, whilst there does not yet appear to be a serious escalation in the rate of new cases in China.”
Wilson said tentative signs of a plateauing in new cases will be supportive of risk.
The blue-chip technology stocks were higher in Seoul, with Samsung Electronics up 2.97% and chipmaker SK Hynix rising 2.53%.
Oil prices were higher at the end of the Asian day, with Brent crude last up 0.86% at $54.92 per barrel, and West Texas Intermediate 1.55% higher at $50.90.
In Australia, the S&P/ASX 200 managed gains of 0.37% to 6,948.70, after the Reserve Bank of Australia stood pat on interest rates in its latest decision, leaving the official cash rate at 0.75%.
“Due to both global and domestic factors, it is reasonable to expect that an extended period of low interest rates will be required in Australia to reach full employment and achieve the inflation target,” said the central bank’s governor Philip Lowe in a statement.
Lowe also touched on the threat of coronavirus, describing it as an uncertainty that was having a “significant effect” on China, one of Australia’s primary trading partners.
He did add that it was “too early to determine” how long and how significant the impact would be.
Across the Tasman Sea, New Zealand’s S&P/NZX 50 was the odd one out, losing 0.33% to 11,511.49.
Stocks linked to international trade led Wellington’s main index lower, given the country’s economy has significant exposure to Chinese markets since signing the first ever free trade agreement with the People’s Republic in 2008.
Specialist dairy exporter A2 Milk was down 0.5%, Fonterra Shareholders’ Fund - which allows traders to participate in the performance of its largest dairy cooperative - fell 1%, and Synlait Milk was 2.4% weaker.
The down under dollars were a mixed picture against the greenback, with the Aussie last 0.29% stronger at AUD 1.4899, while the Kiwi weakened 0.01% to NZD 1.5474.