Asia’s stock markets saw a mixed day of results on Wednesday with good earnings reports in the US lifting sentiment on some trading floors while China’s indexes dropped amid the ongoing Party Congress.
Japanese stocks closed higher, tracking overnight gains on Wall Street following those strong earnings figures from the US, which saw better-than-expected results from Goldman Sachs and Lockheed Martin.
The Nikkei 225 share average rose 0.37%, staying well above the key psychological level of 27,000 throughout the day. It closed at 27,257.38 while the broader Topix index rose 0.19%.
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“Japanese stocks have been fairly steady compared to US stocks,” said Seiji Arai, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
“Stocks have been performing well in Japan due to the exchange rate. So, even if earnings decline it may not have a big impact on financial results, which is why they can stay firm,” he said.
The Nikkei’s best performer was SoftBank Group Corp, which rose 3.72%. Uniqlo parent Fast Retailing Co Ltd , another major contributor to the index, rose 1.13%.
MSCI’s broadest index of Asia-Pacific shares outside Japan reversed earlier gains to fall 0.5%, driven by a 1.2% drop in Chinese blue chips and a fall in Hong Kong’s Hang Seng index.
China stocks fell, with investors cautious amid uncertainties during the Communist Party congress, even as a raft of state-backed and large asset managers announced measures to stabilise the market.
The Shanghai Composite Index dipped 1.19%, or 36.58 points, to 3,044.38, while the Shenzhen Composite Index on China’s second exchange dropped 1.16%, or 23.25 points, to 1,981.84.
Hong Kong shares also snapped a two-day rally, while the city’s leader delivered his first policy address. The Hang Seng Index dropped 2.38%, or 403.30 points, to 16,511.28.
US Dollar Firms
Elsewhere across the region, Australia’s resources-heavy shares gained 0.3%, tracking Wall Street higher while Indian stocks edged ahead with Mumbai’s signature Nifty 50 index up 0.30%, or 52.95 points, at 17,539.90.
Globally, European markets were set to extend the optimism on earnings ahead of British inflation readings.
The pan-region Euro Stoxx 50 futures rose 0.6%, US S&P 500 futures rose 0.7% and Nasdaq futures jumped 1.0%.
The US dollar firmed 0.2% against a basket of major currencies. It hit another fresh 32-year high of 149.34 yen overnight, before stabilising at 149.28 amid risk of intervention from the Japanese authorities.
Sterling gained 0.12% against the greenback to trade at $1.1333 after easing slightly in the previous session.
The UK, which has been roiled by a historic crisis in the government bond market, will report inflation readings for September later in the day, with annual inflation likely running at a double-digit rate of 10% last month.
That would likely pressure the Bank of England to hike more aggressively. The BoE said on Tuesday that it would start selling some of its huge stock of British government bonds from November 1, but would not sell any longer-duration gilts this year.
Oil Prices Recover
Oil prices recovered some ground, after plunging more than 3% in the previous session on fears of higher US supply and the economic slowdown in China.
Brent crude futures rose 0.4% to $90.39 per barrel, while US West Texas Intermediate crude jumped 0.9% to $83.58 per barrel.
US President Joe Biden will announce a plan on Wednesday to sell off the last portion of his release from the nation’s emergency oil reserve by year’s end, and detail a strategy to refill the stockpile when prices drop, a senior administration official said.
US Treasury yields rose slightly on Wednesday after edging lower. The yield on benchmark 10-year notes edged up 3 basis points to 4.0317% while the yield on two-year notes climbed to 4.4543%, compared with the previous close of 4.4370%.
Key figures
Tokyo – Nikkei 225 > UP 0.37% at 27,257.38 (close)
Hong Kong – Hang Seng Index < DOWN 2.38% at 16,511.28 (close)
Shanghai – Composite < DOWN 1.19% at 3,044.38 (close)
London – FTSE 100 < DOWN 0.54% at 6,899.45 (0935 BST)
New York – Dow > UP 1.12% at 30,523.80 (Tuesday close)
- Reuters with additional editing by Sean O’Meara
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