Asia report: Markets mixed amid global political concerns

23rd Jul 2024 09:10

(Sharecast News) - Asia-Pacific markets exhibited mixed performance on Tuesday, with Chinese stocks leading the declines amidst a backdrop of political uncertainty in the US.

Despite that uncertainty, equities on Wall Street still managed to post gains overnight.

"Traders are taking advantage of the recent market slump to buy stocks at a discount, especially in the technology sector," said TickMill market analyst Patrick Munnelly.

"However, they are cautious about making big moves before the release of key US inflation data later in the week.

"The upcoming inflation data could have a significant impact on interest rate expectations, with the US Fed widely anticipated to lower rates by a quarter point in September."

Munnelly also noted the People's Bank of China's surprise reduction in its one-year benchmark loan prime rate in a bid to support its slowing economy.

"Asian currencies also strengthened against a weakening dollar.

"Following a significant tech selloff due to high valuations and sectoral rotation, markets are now pausing for breath.

"While the US election remains a major focus, Kamala Harris has secured enough pledged delegates to win the Democratic presidential nomination, bringing clarity to that aspect of the political landscape."

Markets in a mixed state with China deep in the red

In Japan, the Nikkei 225 closed nearly flat with a marginal decline of 0.01%, settling at 39,594.39.

Notable decliners included TOTO, which fell by 3.09%, Olympus Corporation, which dropped 2.51%, and Yaskawa Electric, down by 2.21%.

The broader Topix index, however, edged up by 0.21% to 2,833.39.

Chinese markets saw significant declines with the Shanghai Composite dropping by 1.65% to 2,915.37, and the Shenzhen Component plummeting by 2.97% to 8,606.58.

Major losers in Shanghai included Guangdong Sitong Group, which plunged 10.02%, Shanghai Jin Jiang International Industrial Investment down by 10.01%, and Zhejiang Jinghua Laser Technology, which decreased by 9.97%.

Hong Kong's Hang Seng Index also fell, declining by 0.94% to 17,469.36.

Among the hardest hit were BYD Electronic International, which fell by 4.74%, Hansoh Pharmaceutical Group, down by 4.27%, and Nongfu Spring, which dropped by 3.78%.

South Korea's Kospi rose by 0.39% to 2,774.29, bolstered by gains in CJ Cheiljedang, which surged by 5.34%, Hankook Tire up by 5.18%, and Doosan Robotics, which increased by 4.77%.

On the downside, Kakao Corporation plummeted by 5.36% following reports that an arrest warrant was issued for its founder, Brian Kim, over allegations of market manipulation.

In Australia, the S&P/ASX 200 advanced by 0.5% to 7,971.10.

Polynovo was the top performer, soaring by 7.88%, followed by Insignia Financial and ZIP Co, which gained 6.8% and 6.2%, respectively.

New Zealand's S&P/NZX 50 increased by 0.94% to 12,425.58, with Oceania Healthcare leading the gains with an 8.45% rise.

KMD Brands and Restaurant Brands New Zealand also saw significant increases, up by 4.76% and 3.75%, respectively.

In currency markets, the dollar was last down 0.71% on the yen, trading at JPY 155.93.

The greenback meanwhile saw modest increases on its downunder counterparts, rising 0.27% against the Aussie to AUD 1.5096, and advancing 0.26% on the Kiwi to change hands at NZD 1.6769.

Oil prices experienced slight gains, with Brent crude futures last up 0.41% on ICE to $82.74 per barrel, and the NYMEX quote for West Texas Intermediate ahead 0.33% at $78.66.

Consumer prices rise more slowly in Singapore

In economic news, Singapore's consumer price index (CPI) increased 2.4% year-on-year in June, surpassing expectations but showing a slower pace compared to May's 3.1% rise.

The figure was below the 2.7% increase forecast by Reuters.

The core inflation rate, which excludes accommodation and private transport costs, rose 2.9%, slightly under the projected 3%.

Meanwhile, South Korea reported a rise in its producer price index (PPI) for June, which climbed 2.5% year-on-year.

That was a slight increase from the 2.3% growth observed in May, indicating a gradual uptick in producer prices.

Reporting by Josh White for Sharecast.com.