Asia report: Most markets lower as Brexit risks weigh
Most markets in Asia finished in the red on Wednesday, as investors in the region turned their attention to Europe, where the threat of a no-deal Brexit was once again rearing its ugly head.
In Japan, the Nikkei 225 was down 0.55% at 23,934.43, as the yen strengthened 0.01% against the dollar to last trade at JPY 109.47.
SoftBank Group went against the trend and rose 1.83%, while Fanuc was down 2.69% and Fast Retailing lost 0.92%.
The broader Topix index slid 0.5% by the end of trading in Tokyo, to finish its trading day at 1,738.40.
In fresh data out of Japan, the country’s exports declined for the 12th month in a row, falling 7.9% year-on-year in November.
That was still better than the 8.6% decline picked by analysts in a Reuters poll, and was an improvement from the 9.2% fall in October.
Imports to the country were worse than expected, however, sliding 15.7%, which was well beyond the 12.7% pencilled in by analysts.
On the mainland, the Shanghai Composite lost 0.18% to 3,017.04, and the smaller, technology-heavy Shenzhen Composite was broadly flat at 1,709.44.
South Korea’s Kospi was off 0.04% at 2,194.76, while the Hang Seng Index in Hong Kong managed gains of 0.15% to 27,884.21.
The blue-chip technology stocks in Seoul were mixed, with Samsung Electronics falling 0.71% as chipmaker SK Hynix gained 0.22%.
Brexit risks were the headline in the region, after reports that Prime Minister Boris Johnson was amending his Withdrawal Bill to rule out any extension to the transition period past the currently proposed December 2020 date.
That, according to experts on both sides of the English channel, would not leave enough time for Westminster to come to a permanent trade agreement with Brussels.
As it stands, the UK is set to leave the European Union on 31 January, with the two economies to undergo a period of alignment and transition for the rest of 2020 as they try to hammer out a permanent trade deal.
Neil Wilson, chief market analyst at Markets.com, noted that sterling had completely retraced its election night rise, settling around the 1.30 level against the dollar once again.
“This seems an odd move - it creates new cliff edge and no-deal risk; the pound’s abrupt unwinding is a sign the market thinks so.
“And it’s pointless to from a technical perspective, hence why it appears odd, as Boris can go back on it anytime should it be required.
“We should look at this for what it really is: legislation that can be overturned with a one-line bill at any stage should the need arise,” Wilson said.
Oil prices were lower at the end of the Asian day, with Brent crude last down 0.49% at $65.78 per barrel, and West Texas Intermediate 0.99% lower at $60.34.
In Australia, the S&P/ASX 200 eked out 0.06% to finish at 6,851.40, while across the Tasman Sea, New Zealand’s S&P/NZX 50 was 0.6% firmer at 11,329.56 - a record high close for the Wellington bourse.
The down under dollars were a mixed picture against the greenback, with the Aussie last 0.03% stronger at AUD 1.4590, as the Kiwi weakened 0.11% to NZD 1.5226.