Asia report: Most markets fall as investors digest RBA minutes

Patrick Munnelly, market analyst at TickMill, said Asian equity markets failed to sustain any momentum from Wall Street’s bumper session overnight.

“The Nikkei 225 initially made gains upon its return from a long weekend but eventually erased those gains, reflecting weakness in its peers.

“The Hang Seng and Shanghai Composite were also lower, with property stocks leading the declines in Hong Kong.

“This was attributed to the long-delayed results of Evergrande, the world's most indebted developer, which reported significant net losses for 2021 and 2022.”

Munnelly noted that US-China relations remained in focus, with amicable comments in talks between US climate envoy John Kerry and China's top diplomat Wang Yi.

“However, reports that the US aims to propose investment limits on China and potential new curbs on chips and semiconductor-making devices tempered the positive sentiment.”

Stocks close mostly weaker across the region

Hong Kong's Hang Seng Index experienced the most substantial dip, plummeting by 2.05% to close at 19,015.72.

The leading contributors to the losses were real estate stocks, with Longfor Properties falling by 9.91%, followed closely by Country Garden Services and Country Garden Holdings, which declined by 9.61% and 7.33% respectively.

Mainland China's indices also closed in the negative zone, with the Shanghai Composite down by 0.37% to 3,197.82, and the Shenzhen Component losing 0.34% to end at 10,972.96.

Among the worst performers in Shanghai were China Science Publishing, dropping by 3.44%, and Agricultural Bank of China, which tumbled by a significant 6.08%.

Meanwhile, South Korea's Kospi fell by 0.43% to finish at 2,607.62, pulled down by Hyundai Glovis and Hyundai Engineering & Construction, which dropped by 4.35% and 3.85% respectively.

In the Australian market, the S&P/ASX 200 slipped by 0.2% to close at 7,283.80.

Ansell and Aurizon Holdings led the losses, with their shares falling by 14.01% and 5% respectively.

New Zealand's S&P/NZX 50 experienced a modest drop, closing down 0.05% at 11,932.81.

SkyCity Entertainment and Fisher & Paykel Healthcare were the primary contributors to the fall, losing 2.13% and 1.55% respectively.

However, it wasn't all doom and gloom as Japan's equity markets bucked the trend.

The Nikkei 225 index edged up 0.32% to close at 32,493.89, while the Topix index gained 0.59% to finish at 2,252.28.

Notably, Okuma Corporation, JGC Corporation, and Amada were the standout performers on Tokyo’s benchmark, with gains of 3.42%, 3.37%, and 2.81% respectively.

In currency markets, the dollar weakened 0.37% against the yen to trade at JPY 138.20.

It remained steady against the Aussie at AUD 1.4671, while it strengthened 0.3% against the Kiwi hitting NZD 1.5859.

Oil prices were slightly down, as Brent crude futures dipped 0.11% on ICE to $78.41 per barrel, and the NYMEX quote for West Texas Intermediate slipping 0.03% to $74.13.

RBA maintains status quo on interest rates amid uncertainty - minutes

According to freshly-disclosed minutes, the Reserve Bank of Australia (RBA) deliberated on whether to hold firm or increase rates by 25 basis points at its July meeting.

Amid considerable uncertainty surrounding the nation's economic climate, the central bank ultimately elected to maintain the prevailing cash rate at 4.1%.

The RBA said that the current monetary policy was “distinctly restrictive” due to the high cash rate, which was keeping mortgage interest payments close to record levels, as seen in May.

It said it recognised the impact of the policy on homeowners and other borrowers in the country.

Additionally, the RBA did acknowledge a downward trend in inflation, which they believed would serve to offset any risks associated with a surge in medium-term inflation expectations.

Specifically, the RBA expressed significant concerns over household consumption, noting a high level of ambiguity in its future trajectory.

Reporting by Josh White for Sharecast.com.