Asia report: Stocks mostly lower after Evergrande bond falls due
Most markets in Asia were lower on Friday, with Japan’s bourses a stark exception, as jitters around property giant China Evergrande continued.
In Japan, the Nikkei 225 was up 2.06% at 30,248.81, as the yen weakened 0.09% against the dollar to last trade at JPY 110.43.
It was a positive day for the benchmark’s key components, with automation specialist Fanuc up 2.25%, fashion firm Fast Retailing rising 1.5%, and technology conglomerate SoftBank Group 2.76% firmer.
The broader Topix index was 2.31% higher by the end of trading in Tokyo, closing at 2,090.75.
On the mainland, the Shanghai Composite was 0.8% lower at 3,613.07, and the smaller, technology-heavy Shenzhen Composite was 0.7% weaker at 2,434.23.
South Korea’s Kospi was 0.08% weaker at 3,125.24, while the Hang Seng Index in Hong Kong slid 1.3% to 24,192.16.
Embattled Chinese property development giant China Evergrande slid 11.61% in the special administrative region, amid ongoing concerns around the company’s viability.
Overnight, the Wall Street Journal reported that Beijing had warned local officials to prepare for the possible collapse of Evergrande, as uncertainty continued as to whether the firm could pay the interest on a dollar-denominated bond that fell due on Thursday.
The blue-chip technology stocks were on the back foot in Seoul, with Samsung Electronics down 0.13%, and SK Hynix losing 1.42%.
“US markets had another solid session with the S&P 500 and Nasdaq Composite both closing back above their 50-day moving averages, while markets in Asia this morning were mixed as the deadline for Evergrande’s US dollar payment came and went with no update on when and whether it would be paid,” said CMC Markets chief market analyst Michael Hewson of the global situation on Friday morning.
“We now start a grace period of at least 30 days before a default can be declared, with Chinese regulators urging the company to avoid a default, with further bond payments also becoming due during that period.
“The Nikkei 225 was higher as Japan played catchup after a bank holiday on Thursday, while Chinese authorities added liquidity for a third day in a row.”
Oil prices were higher as the region entered the weekend, with Brent crude last up 0.34% at $77.51 per barrel, and West Texas Intermediate ahead 0.19% at $73.44.
In Australia, the S&P/ASX 200 lost 0.37% to 7,341.60, while across the Tasman Sea, New Zealand’s S&P/NZX 50 was off 0.35% to 13,259.55.
The down under dollars were both weaker against the greenback, with the Aussie last off 0.39% at AUD 1.3760, and the Kiwi retreating 0.4% to NZD 1.4206.